Wednesday, May 3, 2017

If Trump Pulls out of the Climate Agreement Europe Could Impose a Carbon Tax on the US

"Europe Levels a Carbon Tax Against the US." This could be the headline if President Trump pulls out of the Paris Climate Agreement.  The latest word suggests that the Trump administration is thinking of exiting the historic deal. There are likely to be repercussions from such a move. One of the possible responses involves imposing a carbon tax on all goods being shipped out of the United States.

The idea was proposed by Nichola Sarkozy the former president of France. As quoted in DW, shortly after US election on November 8, Sarkozy Sarkozy said, "Donald Trump has said – we’ll see if he keeps this promise – that he won’t respect the conclusions of the Paris climate agreement". Sarkozy who was running again for president said that he believes Europe should impose a carbon tax on the US.

"Well, I will demand that Europe put in place a carbon tax at its border, a tax of 1-3 per cent, for all products coming from the United States, if the United States doesn’t apply environmental rules that we are imposing on our companies," Sarkozy said.

The world may impose taxes on nations that refuse to honor their emissions reduction commitments. If the US fails to honor its emissions reductions commitments. It is an interesting idea that makes sense. The imposition of a tax would level the playing field for nations who are living up to their Paris pledges (INDC) and investing in emissions reduction. All high emitting nations could be made to pay a tax on all goods exchanged internationally.  In this way, the high carbon economy can help subsidize the low carbon economy.

At the COP22 climate talks in Marrakesh, French President Francois Hollande did not mince words, he called on the United States to respect the Paris Agreement, saying it is "irreversible in law and in fact. In addition, it is irreversible in our minds...The US, the largest economic power in the world, the second-largest greenhouse gas emitter, must respect the commitments they have undertaken."

According to Oldag Caspar, team leader for German and EU low-carbon policy at Germanwatch, it would be far more effective if China joined Europe and a coalition of countries in imposing a carbon tax on high emitting countries.

"It would be a much stronger and more powerful signal if it came from a range of powerful countries united across the world," Caspar said. This would make it clear that the world is unified on the climate front - "then Trump and his team wouldn't be able to spin this move against the EU," Caspar added.

Related
Businesses and Governments React to Trump's Exit from the Paris Climate Deal
Trump Dumps Paris Accord Prompting Outrage and Action
Why Trump Should not Quit the Paris Agreement

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