Carbon Border Tax

Carbon Border Tax

COP 26 at Glasgow, introduced a carbon border tax to the public, though Germany and the EU have been promoting it for the past year or so.

The stated reason for a carbon border tax is to eliminate carbon leakage.

Carbon leakage is where a company stops producing a product in its home country because of high costs created by carbon rules and regulations, and begins to build the same product in a country that doesn’t have costly climate regulations, and then imports the product back into its home country.

The EU, and Germany in particular, have proposed what they have referred to as the Carbon Border Adjustment Mechanism (CBAM).

The Wall Street Journal highlighted the CBAM in an article on November 9, 2021, in which it pointed out that the German economy was no longer providing the European economy with the “kick” to pull Europe out of a recession. 

Here is a quote from the WSJ article.

“German manufacturers are struggling to produce cars and factory equipment because of parts and labor shortages. They face surging energy prices that are making sky-high electricity bills even higher. And they must invest hundreds of billions of dollars over coming years to meet new clean-energy standards.”

And, also from the WSJ article:

“Higher carbon and electricity prices and investments in cleaner production processes and research will eat into already dwindling profits, they warn, especially in a manufacturing-focused, energy-hungry economy.”

In other words, Germany has created a climate monster that’s undermining all of Europe’s economy.

Carbon is of course a misnomer. The correct reference should be to CO2, i.e., carbon dioxide, an invisible, odorless gas, that also happens to be essential for life on Earth.

The obvious solution is to make all other countries install the same regulations and clean energy mandates that have been imposed on German industry.

It is with this background that the EU enticed President Biden to endorse border taxes for all countries at COP 26. The purported aim was to stop the importation of  steel made in China. Steel was selected because it could entice the US steel industry to support border carbon taxes.

But are border taxes good for Americans?

That’s a question that’s addressed in the forthcoming book, Net-Zero Carbon.

Available in January

It addresses how America should respond to border taxes?

. . .



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