Energy Secretary Chu Suggests Carbon Tariff

by | Mar 19, 2009

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Energy Secretary Steven Chu on Tuesday told a House science panel that implementing a carbon tariff will level the playing field if other countries do not mandate greenhouse gas emission reductions similar to President Obama’s plan to limit carbon emissions, reports the Wall Street Journal.

Obama has set a goal of cutting carbon-dioxide emissions by 80 percent from 1990 levels by 2050, and supports a cap-and-trade system that would set limits on greenhouse-gas emissions, reports Bloomberg news.

Chu made the announcement one day after one of China’s top climate envoys, Li Gao, told the Dow Jones Newswires, that a carbon tariff on carbon-intensive imports would provoke a trade war and wouldn’t be legal under World Trade Organization agreements. Gao said that consuming nations should pay for carbon emissions in China.

The carbon tax issue is also important to energy-intensive U.S. industries that are concerned that costs imposed by climate-change laws will put them at a disadvantage with competitors in countries that don’t have similar requirements, reports the Wall Street Journal.

U.S. trading partners, worried about protectionist language, are expressing tough talk against U.S. tariff plans. The Wall Street Journal reports that Mexico announced tariffs on $2.4 billion of U.S. goods in retaliation for limited access of Mexican truckers on U.S. roads. European Union officials also are considering a similar tariff.

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