Copenhagen failed. So should we tax carbon at the border?

Dan Box

8th February, 2010

The lack of agreement at Copenhagen has left some thinking that the only way to protect national economies is to tax imports from nations who don't pay a carbon price...

The letter landed on the desks of US Senate leaders Harry Reid and Mitch McConnell unannounced. Its authors were four of the country's biggest corporate lobbyists; powerful people, not used to being ignored.

'We write to express our deep concerns...' the letter began. Concerns about a proposed government bill, meant to reduce American greenhouse gas emissions and then – as now – being debated by the Senate.

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Inside the bill's 1437 pages was a proposal for a 'border adjustment', a vague phrase meaning that, if the Senate did vote to cut US carbon emissions, a new tax could be imposed on imports from any other country that did not stop polluting in turn.

China and India hated the idea, the letter's authors wrote. The situation could turn nasty, as indeed it did at December's climate summit in Copenhagen, where sniping over border taxes threatened to escalate into something worse.
'Climate change is a global problem that calls for...

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