US’ “Carbon tariff” against WTO rules

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It’s not just the target of reducing greenhouse gas emissions that causes a stir in the American Clean Energy and Security Act (ACES), the proposal of a “carbon tariff” has also attracted particular attention.

Even if the US keeps the promises made in the ACES, it will only lower its emissions in 2020 to the level of 1990. Already, in 2005, the UK and Germany reduced their greenhouse gas emissions by 18.4 percent and 14.8 percent respectively over 1990 levels. Comparatively, the US achieved a “zero emission reduction,” something which raised a lot of criticism.

In addition, a rule in the ACES to “impose a special tariff” stipulates high penalties on foreign products that fail to meet the US’s carbon emission standards. The US said that this is because their manufacturers would be unfairly disadvantaged if other countries did not carry out emission reduction measures. The US claims that imposing a special tariff offsets the induced costs. In response, many countries have explicitly said that the US imposing a “carbon tariff” violates the basic rules of the World Trade Organization (WTO), and its true aim is to protect its own trade under the guise of protecting the environment.

When asked to comment on this issue, US president Obama said that they will carefully analyze the necessity of such a tariff and he thinks there may be other ways to deal with the issue. His uncertain stand has left the US with a lot of leeway to maneuver and has created suspense over whether the Obama administration is able to break through the multiple barriers of party politics, interest groups and trade protectionism, and whether it can truly set a good example and fulfill its obligations.

By People’s Daily Online