Europe’s Green Deal and its planned carbon border tax are in serious trouble as the Biden administration raises concerns about its potentially disastrous fallout on international trade and relations.
According to the European Commission the EU’s Green Deal and its 2050 Net Zero target are threatening the very survival of Europe’s industries unless a carbon border tax is enforced upon countries that are not adopting the same expensive Net Zero policies.
It’s a matter of survival of our industry. So if others will not move in the same direction, we will have to protect the European Union against distortion of competition and against the risk of carbon leakage,” European Commission executive vice-president Frans Timmermans warned in January.
On Wednesday, the European Parliament endorsed the creation of a carbon border tax that is planned to protect EU companies against cheaper imports from countries with weaker climate policies.
However, it would appear that the Biden administration is getting cold feet about the protectionist agenda and its potentially devastating impact of world trade, throwing a spanner in the EU’s plans.
John Kerry, Joe Biden’s climate envoy, has warned the EU that a carbon border tax should be a “last resort,” telling the Financial Times that he was “concerned” about Brussels’ forthcoming plans.
He urged the EU to delay any decision until after the COP26 climate summit in Glasgow.
It [a carbon border tax] does have serious implications for economies, and for relationships, and trade,” he said. “I think it is something that’s more of a last resort, when you’ve exhausted the possibilities of getting emission reductions and joining in some kind of compact by which everybody is bearing the burden.”
According to Kerry, the UN climate summit in November would be a success if all countries adopted Net Zero emissions targets similar to those adopted by Western nations.
The fundamental problem with Kerry’s demand, however, is that it contravenes the Paris Climate Agreement which cements the UN’s key principle of ‘Common but Differentiated Responsibilities and Respective Capabilities.‘ This principle acknowledges that developing nations have different capabilities and differing responsibilities in reducing CO2 emissions.