Europe Considering Carbon Tariff On Outside Goods

March 10th, 2014 BY Meredith Melnick | No Comments

It seems that the European Commission is unwilling to wait for the U.N. to impose global carbon emission cuts. The governing body of the European Union is currently considering proposals for post-2012 environmental regulations. Among them is a measure to introduce a tariff on all goods that have been imported from countries with more relaxed carbon caps. This carbon tariff would make European manufacturers competitive with their foreign counterparts who may be able to lower prices due to less regulation. The tariff would directly reflect the price of the emissions permits needed to make the product compatible with Europe’s carbon caps.

The European Union is attempting to lead the charge for stricter emissions targets and environmental legislation through example. They have pledged to reduce greenhouse gases by one-fifth by the year 2020 and, to do so, must make radical changes to many of their industries. Additionally, they need to find innovative ways to impose those changes on the countries with which they do business. However, the many industries within the E.U. – in particular the strong steel industry – fear that they will no longer be competitive with manufacturers from industry-heavy nations in the developing world (like China, India and Brazil) and in the developed world (like the U.S. and Canada) if these measures pass. The E.U. Trade Commissioner, Peter Mandelson dears difficulty at the implementation level and also worries about possible trade disputes.

The measure was first introduced by French President Jacques Chirac as part of his stated plan to make France an environmental leader, but in order to pass, it must be accepted by the national governments of the union members. While only a preliminary draft has been made, a final draft should be available by January 23rd.

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