This Tariff Could Be Biden’s Best Climate Change Tool

President Joe Biden has plans to fight climate change with clean energy mandates, investments in electric vehicles and tough new limits on greenhouse gas emissions. But his most potent weapon against global warming may be a so-called border adjustment tariff levied on certain carbon-intensive goods imported from countries with lax climate controls. Such a tax, which is under consideration in other countries as well, is seen as a way to crack down on planet-warming pollution while protecting domestic workers. It also could ignite new trade tensions and run afoul of World Trade Organization rules.

The Office of the U.S. Trade Representative says “carbon border adjustments” are among several “market and regulatory approaches” under consideration to address greenhouse gas emissions. Biden embraced the idea of carbon adjustment fees or quotas during his campaign for president. Border adjustments are already widely used globally, with the most common example being value added taxes charged by developed countries, including members of the European Union.