A big storm on the horizon… get ready for it
Border tax adjustments (‘carbon tariffs’) are inevitable once mandatory carbon taxes or emission caps with market value are applied to production. Now, the Obama administration acknowledges that:
“Mr. Chu, speaking before a House science panel, said establishing a carbon tariff would help ‘level the playing field’ if other countries haven’t imposed greenhouse-gas-reduction mandates similar to the one President Barack Obama plans to implement over the next couple of years. It is the first time the Obama administration has made public its view on the issue” Extract from Wall St Journal
The border adjustment of taxes by means of a ‘carbon tariff’ is not a problem in itself. Border adjustments for VAT and consumption taxes are a longstanding GATT/WTO system that has been un-controversial since the 1970s. The biggest problem is a political problem posed by international legal concepts of equity and responsibility that are bound to cause bitter conflict between governments long before any system of ‘carbon tariffs’ is put in place.