
Noah Kaufman on Green Trade Tensions
IMF Podcasts
The Role of Carbon Pricing in Decarbonization
Carbon pricing and tariffs are crucial for making green technology economically viable in the push for decarbonization./nEurope, the UK, Canada, and other countries are following the playbook of carbon pricing as a key strategy in their decarbonization efforts./nAlthough the US has not been able to pass any kind of carbon price at the federal level, there is a desire to harmonize efforts with Europe and other countries with carbon pricing policies in place./nThe US carbon tariffs are more of a straight tariff on the carbon intensity of imports, and foreign countries are questioning their rationale as a developed country with cleaner manufacturing processes./nCarbon border adjustment mechanisms like Europe's CBAM proposal extend carbon pricing to imported products and have created awkwardness in relations with the US./nOverall, carbon pricing and tariffs are necessary but politically complex components of the push for decarbonization.