A Border
Carbon Adjustment
The Problem
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.
The Solution
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.
