US lawmakers mull import fee for carbon-intensive products


The two parties of the US Congress are currently discussing a potential bipartisan energy and climate bill, including the possibility of imposing a levy on carbon-intensive products entering the country, according to local media.

Such tariff is expected to reduce emissions while also making domestic firms more competitive versus less carbon-efficient companies abroad.

In July 2021, Senator Chris Coons, co-chair of the Senate’s Climate Solutions Caucus, introduced the bill to levy a ‘polluter import charge’ on some carbon-intensive items entering the country.

The levy would initially apply to aluminum, cement, iron, steel, natural gas, petroleum, and coal imports before expanding to other types of imports. The fee’s proceeds would go toward technology that cut emissions and assist workers and businesses affected by the clean energy transition.

Given the lack of a national carbon pricing in the United States, the government will be able to create a benchmark for the carbon intensity of goods through imposing carbon import fee, while prompting companies to assess fees on import if their carbon density exceeds that of domestically produces alternatives, according to Greg Bertelsen, CEO of the Climate Leadership Council.

If imports to the United States had the same carbon intensity as more efficiently produced domestic goods, emissions would be reduced by 600 million metric tonnes per year, he added.

Collaboration with allies would help boost those environmental benefits, said Bertelsen. If the United States joined the EU, the United Kingdom, Canada, and Japan, and each country’s imports equaled their average domestic emissions intensity, world emissions would be reduced by 1.8 billion metric tonnes per year.

During the presidential campaign, US President Joe Biden advocated for carbon adjustment taxes or quotas for countries that fail to achieve their climate change obligations. However, the administration hasn’t developed a strategy for doing so.

Furthermore, the United States could face tariff challenges before the World Commerce Organization, whose rules make it difficult for countries to restrict trade. Consumers of US steel imports may also object to the proposal due to cost concerns, especially at a time when inflation has invaded supply chains.

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