Trade Issues and Carbon Tarriffs Debated in House Climate Change Hearing

"Carbon tariffs," the imposition of costs or requirement to obtain greenhouse gas offsets or carbon credits for products imported from countries that are not cutting their greenhouse gas emissions, have become an increasing focus of debate in the United States and in the European Union .  These debates have arisen because of the cuts the EU has adopted and the US is considering in greenhouse gas emissions.  Industry and labor unions are fighting a unilateral cut without cuts in China, India and other larger developing countries.  However, carbon tariffs may face a challenge in the World Trade Organization. 

The debate over carbon tariffs was intense at recent committee hearings in the House of Representatives.  The US Trade Representative sent a letter to Joe Barton, the ranking Republican member of the House Energy and Commerce Committee, cautioning lawmakers on using trade to force greenhouse gas emission reductions.  The letter suggested negotiations over climate change treaties be used rather than import barriers to achieve a solution to the harm climate change may cause.

The Lieberman-Warner Climate Security Act that was voted out of the Senate Committee on Environment and Public Works contains provisions requiring imported products to obtain credits for greenhouse gas emissions and imposing restrictions on the use by US regulated emitters of carbon credits from countries that do not have a similar greenhouse gas emission regulatory system to that of the US. 

Debate over trade restrictions and carbon tariffs appears to be one of the most significant issues and points of debate that will face lawmakers in developing US climate change legislation.