There’s a looming problem with President Joe Biden’s climate agenda.
The administration is considering taxing imports of carbon-intensive goods, fulfilling a Biden campaign promise to punish China and other countries that are “failing to meet their climate and environmental obligations.”
But economists warn such a policy, known as a border carbon adjustment, would be unworkable unless the United States imposed a carbon tax or a similar pricing scheme on its own domestic goods.
Right now, Biden is not planning a carbon tax as part of his new goal to cut U.S. emissions in half by 2030 and has instead proposed for Congress to pass a clean electricity standard mandating utilities use more zero-carbon electricity.
At an event on Thursday hosted by the Niskanen Center, moderator Joseph Majkut, the group’s director of climate policy, referred to the infeasibility of the U.S. proceeding on a border adjustment without a domestic carbon tax as “the elephant in the room” threatening the Biden administration’s climate agenda.
“If the U.S. didn’t have a national carbon price, it just doesn’t make sense to have a border carbon adjustment,” Shuting Pomerleau, a Niskanen climate policy analyst, told the Washington Examiner in a subsequent interview. “You are not putting a price on carbon emissions domestically, so how do you justify a tax on imported goods?”
At least some officials in the Biden administration are aware of this potential hypocrisy.
Noah Kaufman, a senior economist in the White House Council of Economic Advisers, previously told the Washington Examiner before joining the administration that the U.S. could not tax other countries’ carbon-intensive products if it didn’t first penalize its own.
“In a world without a carbon tax, we would basically be saying we are applying this somewhat arbitrary tax to your goods even though we’re not applying it to our goods,” said Kaufman. …