We have the data. The basket of goods for which emissions data is already available and verifiable account for more than 80% of U.S. traded carbon.
Right now, there is no penalty for sending goods made with high emissions into the U.S. market. As a result, U.S. manufacturers who are investing in cleaner ways of doing business are vulnerable to competition from producers overseas with lower costs and higher emissions. Without a remedy, our manufacturers risk losing out to overseas competitors selling high emissions goods into our market.
Currently, the U.S. imports 75% of its goods from less carbon efficient countries.
When it comes to trade, we should enact policies that discourage products made with higher carbon pollution and incentivize products made with less carbon pollution. A border carbon adjustment (BCA) backed by a domestic carbon fee ensures U.S. businesses compete on a level playing field against foreign producers and rewards the cleanest companies.
How it Works:
The BCA refunds manufacturers for all carbon fees paid when they export goods abroad.
The BCA applies its domestic carbon price to imports at the border.
The BCA charges imports for every ton of carbon emissions associated with a given good.
“For example, when steel rebar is produced in America for the construction industry, it typically generates less than a quarter of the carbon emissions per ton than rebar manufactured elsewhere in the world.”
This means U.S. steelmakers will gain from a domestic carbon fee and border carbon adjustment, and that translates into more economic growth and American jobs.
‘A BCA Is Easier Than You Think’
We already have what we need to get started:
We have the expertise. U.S. federal agencies already apply charges at the border in compliance with U.S. trade law and trade agreements. The existing approach to fuel excise taxes provides a proven model for the BCA export adjustment.
We have the enforcement capability. U.S. Federal agencies already investigate violations of U.S. trade laws and pursue civil and criminal penalties for fraudulent claims.