Tucked away in the climate change bill introduced in the US Senate this week by John Kerry (D-MA) and Joe Lieberman (I-CT) is a provision that calls for unilateral US action against any nations that have not enacted emissions limits.
Specifically, the American Power Act states that, pending the enactment of a global agreement on climate change by Jan. 1, 2020, imports from non-compliant countries would be subject to a tariff to avoid “carbon leakage” (i.e., the transfer of manufacturing operations to sites with lower emissions standards).
In a nod to World Trade Organization agreements, the senators assert this “border adjustment” would comply to WTO rules (see page 3).
NAM’s response to the bill was mixed, and focuses more on other aspects of it, specifically provisions for offshore drilling.
The potential ramifications of such a law are interesting, especially in light of China’s (aka The World’s Workshop) resistance to almost any form of external environmental pressure. Certainly the world will be a very different place in 10 years, and it’s impossible to know whether technology and other innovations will have allowed the US to wrest back control over certain manufacturing markets. But personally, I don’t think this bill has any chance of becoming law, so it’s probably a moot point.