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The “Green Trade War” – Business Groups up in Arms over Carbon Tariffs

| Friday July 31st, 2009 | 0 Comments

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“Business Groups: U.S. Faces ‘Green Trade War’ over Carbon Tariffs.” When I read this Environmental Leader headline, the idealist in me sighed. Wouldn’t it be nice if passing environmentally helpful legislation was, well, easy? In reality, though, businesses are expressing strong concerns – and warnings – as legislators attempt to shape a more eco-friendly economy.

According to a Reuters report, four powerful U.S. business groups (including the U.S. Chamber of Commerce and the National Foreign Trade Council) wrote a letter to Congress warning against levying tariffs against carbon-intensive products. Doing so, the letter said, could start a “green trade war,” disrupting global trade systems, violating U.S. trade obligations, and negatively impacting the nation’s relations with key trading partners. The letter reportedly advised “international cooperation” instead of “unilateral ultimatums.”

Not exactly music to legislators’ ears, given the already-intense debate in the Senate over passing Obama’s climate change legislation, which passed in the House last month. (The bill is due to pass the Senate in September.) Senators have debated everything from the bill’s provisions to its language. The bill, which is designed to reduce U.S. CO2 emissions by 83 percent by 2050, includes a “border adjustment” program that would, if passed in its current form, allow additional tariffs on carbon-intensive goods (i.e. steel, cement, and paper) from countries not doing enough to trim their emissions (per the U.S.’s estimation).

U.S. businesses are not alone in their objections to the bill. China, India, and other developing countries have also objected strongly to it, asserting that the U.S. (and other emissions-heavy developed nations) should take responsibility for curbing emissions.

Climate change will, expectedly, be high on the White House’s agenda next week, when it will host talks with Chinese Vice President Premier Wang Qishan and other Chinese officials. (The U.S. is second only to China in per-capita greenhouse gas emissions, and the two countries combined account for approximately 40 percent of emissions annually.)


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