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NEW YORK -(Dow Jones)- United States Steel Corp. (X) opposes the U.S. government’s plan to impose a carbon dioxide cap and trading system on the steel sector in the absence of a global agreement, the company’s chief executive said on Tuesday.
Speaking on the sidelines of the World Steel Dynamics’ Steel Survival Strategies conference in New York, John Surma said, “Imposing carbon pricing mechanisms on steel producers here in the U.S. utterly defeats the purpose as far as policy (is concerned), which is presumably aimed at reducing green house gases.” He said imposing a type of carbon tax on steel companies would make the U.S. steel industry less competitive against steelmakers in countries that have less stringent environmental regulations and would ultimately lead steelmakers to relocate their production abroad.In other words, the proposed policy would lead to carbon leakage that would shift emissions to other places in the globe rather then reducing emissions in absolute terms.He recommended the U.S. only apply such a carbon pricing system if it is able to agree on an international emissions reduction plan that encompasses entire sectors.
By Alex MacDonald, Dow Jones Newswires; [email protected]; +44-207-842-9328
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Waiting for a global agreement would be a long term project. On the other hand, making US steel production less competitive will just drive another manufacturing sector to China, which then in turn weakens the US economy even further.
I’m glad I’m not in charge of making that call.
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