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Noah Kaufman on Green Trade Tensions

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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.

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