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Trade is the next big thing in climate policy.
One of the year’s most interesting climate policies was just proposed … by a Republican.
Two, actually.
On Thursday, Senators Bill Cassidy and Lindsey Graham released a bill that would establish a “foreign pollution fee,” a new type of tariff that would raise the cost of products imported from countries with substantially higher emissions than the United States.
If that sounds suspiciously like a carbon price, you’re not wrong: Both policies aim to make dirtier products more expensive. But unlike a carbon price, the foreign pollution fee would apply only to imported products, not to anything made within the United States. In essence, it would be a carbon tax imposed only at the border.
That would theoretically penalize China, the world’s largest emitter of climate pollution — and that’s the point. “It makes absolutely no sense that we allow China to pollute freely and export their products to the U.S. — displacing U.S jobs, manufacturing, and excellence,” Cassidy, who represents Louisiana, said in a statement.
The bill takes advantage of the fact that American heavy industries generally have cleaner processes than their Russian, Chinese, or Indian competition. Chinese plastic makers, for instance, emit perhaps twice as much carbon for every unit of production as American plastic makers.
Under the GOP proposal, the government would set country-by-country tariffs so as to bring the carbon intensity of America’s imports closer to the carbon intensity of American-made products. The tariff would focus first on a few industries, including steel and iron, minerals, plastics, and solar panels. (The Biden administration has continued Trump-era tariffs on Chinese exports of some of those products.)
The bill would set up a new council, composed of federal scientists, officials, and private sector CEOs, to advise on the right tariff level. It would also let federal trade officials negotiate exemptions for countries.
Could the bill, or a policy like it, pass? Probably not in the next 12 months: The House of Representatives is a mess and, in any case, lawmakers rarely pass major policy in a presidential election year. But beyond that, advocates are surprisingly optimistic.
That’s because Democrats in Congress have released their own versions of a carbon tariff, and although they favor different designs than the GOP proposal, they are congealing around shared goals. Earlier this year, Senator Chris Coons of Delaware and Representative Scott Peters of California advanced a carbon tariff that would impose the cost of meeting American environmental regulations on imported goods. In essence, it says that if American manufacturers have to pay to meet the Environmental Protection Agency’s rules, then foreign manufacturers should have to pay, too.
Another proposal from Senate Democrats would charge importers for the social cost of the carbon pollution emitted to make their products. That bill would set the tariff at $55 per ton of carbon and steadily increase it every year.
Even if they look different, these policies share the same objectives, Greg Bertelsen, the CEO of the Climate Leadership Council, a center-right advocacy group that supports carbon border fees, told me.
“The interesting thing about this approach is that it appeals to interests on both sides of the aisle,” he said. “The members that have introduced these policies all have an interest in lowering global emissions, improving U.S. competitiveness, and benefiting our geopolitical interests.”
How they prioritize those policies may vary — Republicans tend to focus more on competing with China, while Democrats on lowering global emissions — but virtually all the members favor the same general tools, he said. “If we’re looking to where we might be able to find common ground on these issues, this approach is the most promising one out there.”
Trade — the fact that goods move around the world — has historically been one of climate policy’s hardest problems. Because climate change is caused by the global stock of atmospheric carbon dioxide, cutting pollution in one country matters only if it ultimately reduces global pollution. Yet if a country imposes a high carbon tax, then its companies will likely respond by importing certain products from abroad.
Because of this problem, economists have historically been fonder of a carbon border fee than they are of more conventional types of tariff. In 2015, the Yale economist and Nobel laureate William Nordhaus argued for the creation of “climate clubs,” groups of countries that agree to abide by the same domestic carbon price, trade freely among themselves, and penalize nonparticipants by imposing a fee on imports.
That approach underpins the European Union’s new carbon border adjustment mechanism, or CBAM, which launched last month but which will fully go into effect in 2026. It essentially imposes Europe’s carbon price — which is set by a shared continental market — on imports into the 27-country bloc.
Cassidy and Graham, the Republican senators, are at pains to distinguish their proposed “foreign pollution fee” from that Euro-coded approach. The CBAM rewards companies that adopt greener production methods, for instance, but theirs does not: It judges countries by the carbon intensity of their industry as a whole. “China can game the CBAM easily by shifting cleaner exports to the E.U. and dirty products elsewhere,” the senators explain in an FAQ released with their bill.
Of course, what’s even more distinctive about these new American proposals is that the United States does not have a domestic carbon price at all. Instead, it has chosen to subsidize its zero-carbon industries through the grants and tax credits in the Inflation Reduction Act. But harmonizing that subsidy-driven scheme with Europe’s fee-based approach has been difficult so far; initial talks to create a shared “arrangement” for steel exports — a kind of transatlantic climate alliance — have broken down due to a lack of E.U. support.
Now, European imports probably wouldn’t face high tariffs under any of the American proposals, because E.U.-made goods are generally lower carbon than those made in the United States. But the path that America is moving toward — passing a carbon border fee without a domestic carbon price — is highly eccentric (a phrase that I mean in a non-derogatory way). A carbon tariff makes perfect political sense domestically, but it may perplex the rest of the world, and Europe especially. And the rest of the world has options: Even though China’s industry is very dirty, its government also already imposes a low carbon price on some industries and in some places.
Yet that all lies in the future. For now, I’d take this Cassidy and Graham proposal seriously: It is possible to imagine some version of this idea passing, perhaps even in a bipartisan way. And more importantly, it reveals how inseparable geopolitics is becoming from the climate challenge. On issue after issue, China and America’s rivalry over security and technology is spilling into the rest of the economy.
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And more of this week’s top renewable energy fights across the country.
1. Otsego County, Michigan – The Mitten State is proving just how hard it can be to build a solar project in wooded areas. Especially once Fox News gets involved.
2. Atlantic County, New Jersey – Opponents of offshore wind in Atlantic City are trying to undo an ordinance allowing construction of transmission cables that would connect the Atlantic Shores offshore wind project to the grid.
3. Benton County, Washington – Sorry Scout Clean Energy, but the Yakima Nation is coming for Horse Heaven.
Here’s what else we’re watching right now…
In Connecticut, officials have withdrawn from Vineyard Wind 2 — leading to the project being indefinitely shelved.
In Indiana, Invenergy just got a rejection from Marshall County for special use of agricultural lands.
In Kansas, residents in Dickinson County are filing legal action against county commissioners who approved Enel’s Hope Ridge wind project.
In Kentucky, a solar project was actually approved for once – this time for the East Kentucky Power Cooperative.
In North Carolina, Davidson County is getting a solar moratorium.
In Pennsylvania, the town of Unity rejected a solar project. Elsewhere in the state, the developer of the Newton 1 solar project is appealing their denial.
In South Carolina, a state appeals court has upheld the rejection of a 2,300 acre solar project proposed by Coastal Pine Solar.
In Washington State, Yakima County looks like it’ll keep its solar moratorium in place.
And more of this week’s top policy news around renewables.
1. Trump’s Big Promise – Our nation’s incoming president is now saying he’ll ban all wind projects on Day 1, an expansion of his previous promise to stop only offshore wind.
2. The Big Nuclear Lawsuit – Texas and Utah are suing to kill the Nuclear Regulatory Commission’s authority to license small modular reactors.
3. Biden’s parting words – The Biden administration has finished its long-awaited guidance for the IRA’s tech-neutral electricity credit (which barely changed) and hydrogen production credit.
A conversation with J. Timmons Roberts, executive director of Brown University’s Climate Social Science Network
This week’s interview is with Brown University professor J. Timmons Roberts. Those of you familiar with the fight over offshore wind may not know Roberts by name, but you’re definitely familiar with his work: He and his students have spearheaded some of the most impactful research conducted on anti-offshore wind opposition networks. This work is a must-read for anyone who wants to best understand how the anti-renewables movement functions and why it may be difficult to stop it from winning out.
So with Trump 2.0 on the verge of banning offshore wind outright, I decided to ask Roberts what he thinks developers should be paying attention to at this moment. The following interview has been lightly edited for clarity.
Is the anti-renewables movement a political force the country needs to reckon with?
Absolutely. In my opinion it’s been unfortunate for the environmental groups, the wind development, the government officials, climate scientists – they’ve been unwilling to engage directly with those groups. They want to keep a very positive message talking about the great things that come with wind and solar. And they’ve really left the field open as a result.
I think that as these claims sit there unrefuted and naive people – I don’t mean naive in a negative sense but people who don’t know much about this issue – are only hearing the negative spin about renewables. It’s a big problem.
When you say renewables developers aren’t interacting here – are you telling me the wind industry is just letting these people run roughshod?
I’ve seen no direct refutation in those anti-wind Facebook groups, and there’s very few environmentalists or others. People are quite afraid to go in there.
But even just generally. This vast network you’ve tracked – have you seen a similar kind of counter mobilization on the part of those who want to build these wind farms offshore?
There’s some mobilization. There’s something called the New England for Offshore Wind coalition. There’s some university programs. There’s some other oceanographic groups, things like that.
My observation is that they’re mostly staff organizations and they’re very cautious. They’re trying to work as a coalition. And they’re going as slow as their most cautious member.
As someone who has researched these networks, what are you watching for in the coming year? Under the first year of Trump 2.0?
Yeah I mean, channeling my optimistic and Midwestern dad, my thought is that there may be an overstepping by the Trump administration and by some of these activists. The lack of viable alternative pathways forward and almost anti-climate approaches these groups are now a part of can backfire for them. Folks may say, why would I want to be supportive of your group if you’re basically undermining everything I believe in?
What do you think developers should know about the research you have done into these networks?
I think it's important for deciding bodies and the public, the media and so on, to know who they’re hearing when they hear voices at a public hearing or in a congressional field hearing. Who are the people representing? Whose voice are they advancing?
It’s important for these actors that want to advance action on climate change and renewables to know what strategies and the tactics are being used and also know about the connections.
One of the things you pointed out in your research is that, yes, there are dark money groups involved in this movement and there are outside figures involved, but a lot of this sometimes is just one person posts something to the internet and then another person posts something to the internet.
Does that make things harder when it comes to addressing the anti-renewables movement?
Absolutely. Social media’s really been devastating for developing science and informed, rational public policymaking. It’s so easy to create a conspiracy and false information and very slanted, partial information to shoot holes at something as big as getting us off of fossil fuels.
Our position has developed as we understand that indeed these are not just astro-turf groups created by some far away corporation but there are legitimate concerns – like fishing, where most of it is based on certainty – and then there are these sensationalized claims that drive fears. That fear is real. And it’s unfortunate.
Anything else you’d really like to tell our readers?
I didn’t really choose this topic. I feel like it really got me. It was me and four students sitting in my conference room down the hall and I said, have you heard about this group that just started here in Rhode Island that’s making these claims we should investigate? And students were super excited about it and have really been the leaders.