Nations of the World, Unite! A Carbon Tariff for Trump's America

June 2, 2017

Last night Trump announced his intention to pull out of the Paris Climate Accord. Every sign pointed towards him doing so, but it still was upsetting for so many in the US, Europe, and across the globe. Macron quite brilliantly addressed the American people in English after Trump’s decision came to light last night, castigating Trump's decision.  It’s that kind of act of strength and independence that leaders hopefully will follow.

 

At this moment it is clear what must be done, and it must come on fast: the remaining 194 countries in the Climate Accord should immediately impose a carbon tariff to recoup the funds that the Green Climate Fund will now fail to receive from the US. As of now, the US has transferred a mere half a billion dollars to the Green Climate Fund. However, as part of the Paris Accord the US committed to a $3 billion contribution to the fund. This additional $2.5 billion should be immediately collected through a carbon tariff on US carbon intensive exports.[1]

 

Feeding all the revenue from this tariff into the Green Climate Fund would guarantee that the commitments of the treaty would stand – i.e. giving less incentive for other developed countries to abandon their commitments to the fund and giving less incentive for developing countries like India to abandon their reduction targets.

 

Despite Trump’s decision to withdraw from the Paris Accord, he has committed to doing this formally, that is though the treaty. Meaning the US will not technically leave the Accord until 2020 and will be liable to the legal spirit of the treaty. Given this, the other 194 signatories of the treaty should use the carbon tariff to compel the US to live up to its commitments. If the US does not live up its committed reduction, revenue should be raised from the US through the carbon tariff and dedicated to the Green Climate Fund.

 

To live up to the spirit of the treaty, the size of the tariff should be determined by an independent body with the sole mandate of closing the gap between the US’s committed reduction in greenhouse gas emissions and its actual reduction. This means that the tariff would be used to impose Pigouvian incentives on US exporters – taxing a bad thing such that its supply would be reduced – as well as reducing greenhouse gas emissions through dedicating the revenue raised to clean energy investment.

 

There is no reason in which the 194 countries that remain in the Paris Climate Accord should not impose a carbon tax on the United State. If almost every nation participates, the pressure on the US’s bottom line may be so great and exert so much pressure that even the Trump administration may rethink its decision. And with such widespread participation in the carbon tariff, the motivation to impose a retaliatory tariff would be foolish.

 

If Trump understands tough bargaining, then the rest of the world should use it. The rest of the world should not waste it’s time for the domestic politics of the US to dictate the future of the Earth. This undemocratic fact of allowing the United States to impose a cumulative majority of greenhouse gas emissions without bearing the cost must be stopped.

 

 

 

 

 

[1] http://www.greenclimate.fund/partners/contributors/resources-mobilized

 

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