Breakingviews - EU can afford to act tough on carbon border taxes

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Breakingviews - EU can afford to act tough on carbon border taxes
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From Breakingviews: The EU can afford to act tough on carbon border taxes

A cloud of waste gas billows out of chimney stacks at a wood processing factory belonging to Switzerland's Krono group in the eastern German village of Heiligengrabe near Berlin June 2, 2004. REUTERS/Christian Charisius

Opponents of a so-called Border Carbon Adjustments have several lines of attack. Practically, attributing specific emissions to each imported good is a recipe for a bureaucratic muddle. Legally, World Trade Organization rules frown on discriminatory tariffs. Politically, BCAs might only worsen the past year’s tit-for-tat tariff fight between Europe and the United States.

Yet for each negative, there’s a pushback. Practically, the EU’s 17% share of world trade in goods and services in 2018 gives it clout. For example, the EU’s so-called REACH standards on potentially hazardous chemicals have become a de facto near-global standard. Legally, while WTO rules prevent differential treatment against imports, there’s nothing banning varying taxation on individual sectors. Besides, environmental grounds can justify some types of special treatment.

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