Quote Originally Posted by bill View Post
Green trading policies are currently a heavy debated subject.
From the CFR site article a few good links.
Policy Clash Looms between Trade and Climate

March 12, 2008
Author: Toni Johnson

Steel imports, from countries such as China, could face green tariffs under climate change proposals being considered by the U.S. Congress. (AP/Imaginechina)

Canada’s ambassador sent a letter (PDF) to U.S. officials in February warning that an overly broad interpretation of the Energy Independence and Security Act, signed into law in December 2007, could actually prohibit the United States government from importing oil. The law prohibits the import of alternative fuels with higher greenhouse-gas emissions than conventional petroleum sources. Canada points out this might be read to include oil from tar sands, which makes up the bulk of the oil Canada sends to the United States. Canada is the largest single supplier of oil to the United States, thanks in part to the North American Free Trade Agreement (NAFTA).
The concerns raised by the Canadian embassy highlight a looming clash between climate change policy and U.S. commitments to free trade. After years in which the United States declined to take part in the multilateral approach to climate policy, symbolized by the Kyoto Protocol, U.S. lawmakers appear ready to push through climate change legislation. But lawmakers worry about U.S. competitiveness. They want to discourage industries from relocating abroad to avoid climate regulation. They also want to ensure foreign producers don’t get a “free ride” on greenhouse-gas regulations when U.S. industries are forced to comply. Under pending proposals (PDF), U.S. lawmakers are weighing several options that would penalize foreign trading partners if they do not take steps to reduce emissions during the production of commodities for the U.S. market. But the import taxes, labeling specifications, and requirements to purchase emissions permits being proposed are in conflict with the notion of free trade, say some experts. The European Union, in particular, is considering such measures (EurActiv), many of them directed at producers in the United States.
U.S. lawmakers and environmental advocates believe these measures would fall within World Trade Organization (WTO) rules covering environmental standards. But some experts disagree. Although the WTO allows discriminatory actions by members for environmental concerns, such measures must be proved not to be arbitrary, overly onerous, or merely using the environment as a means to erect covert trade barriers. International trade lawyer Bernd G. Janzen says that to date, the WTO’s rulings on these issues offer little in the way of guidelines for U.S. or other policymakers. A report from the National Foreign Trade Council, a U.S.-based trade advocacy group, points to a 1994 WTO ruling (PDF) that prevented the United States from imposing an auto import tax on based on fuel efficiency standards.
Gary Clyde Hufbauer, an economist at the Peterson Institute for International Economics, told U.S. lawmakers earlier this month that almost all environmentally based trade restrictions (PDF) stand a good chance of a WTO challenge. He says such restrictions could spark retaliation on U.S. exports. Sebastian Mallaby, director of CFR’s Center for Geoeconomic Studies, says the potential destabilizing force of green tariffs on existing international trade deals should be assessed before finishing a new round of global trade talks. The U.S. Chamber of Commerce, a powerful proponent of free trade, suggests a better climate policy solution would be liberalizing the trade of clean energy technologies (PDF). The Bush administration and European Union are both pushing for an end to clean-technology tariffs currently imposed by other countries. The administration has also warned against imposing the type of tariffs being proposed in Congress and the European Union.
A number of policy groups, including the Center for American Progress, suggest climate trade restrictions should be policy “tools of last resort.” Instead they suggest engaging countries in multilateral or bilateral climate agreements. A 2008 World Bank report notes that many climate measures focus on production methods and processes (PDF), which it suggests could be crucial to finding a regime that can pass WTO muster. The WTO recently upheld a U.S. ban on imported shrimp trawled without protective measures for sea turtles. In that ruling, the WTO noted that the disputants were all signatories of the same endangered species treaty. Such reasoning, the report says, could be applied to climate and trade policy clashes between nations.

A carbon intensity tax could be placed on oil using products.

Carbon Tariffs?,,,,
What’s next a carbon currency?
  • MARCH 18, 2009 Energy Chief Says U.S. Is Open to Carbon Tariff


    WASHINGTON -- Energy Secretary Steven Chu on Tuesday advocated adjusting trade duties as a "weapon" to protect U.S. manufacturing, just a day after one of China's top climate envoys warned of a trade war if developed countries impose tariffs on carbon-intensive imports.
    Steven Chu

    Mr. Chu, speaking before a House science panel, said establishing a carbon tariff would help "level the playing field" if other countries haven't imposed greenhouse-gas-reduction mandates similar to the one President Barack Obama plans to implement over the next couple of years. It is the first time the Obama administration has made public its view on the issue.
    "If other countries don't impose a cost on carbon, then we will be at a disadvantage...[and] we would look at considering perhaps duties that would offset that cost," Mr. Chu said.
    Li Gao, a senior Chinese negotiator from the National Development and Reform Commission, told Dow Jones Newswires Monday that a carbon tariff would be a "disaster," would prompt a trade war and wouldn't be legal under World Trade Organization agreements
    "It does not abide by the rule of [the] WTO and, secondly, it's not fair," Mr. Gao said, adding that his delegation would relate China's concerns to U.S. officials.
    Mr. Chu's comments came amid other signs of concern among U.S. trading partners about protectionist rhetoric and legislation from Washington. On Monday, Mexico announced it would put tariffs on $2.4 billion of U.S. goods in retaliation for a measure to limit the access of Mexican truckers to U.S. roads. "Buy American" provisions tied to the recent stimulus package have prompted concerns from some U.S. trading partners, and trade issues are expected to be prominent on the agenda at meetings next month among leaders of the Group of 20 leading nations.
    European Union Trade Commissioner Catherine Ashton said in an interview in Washington Tuesday that she hopes the Obama administration will give strong backing to relaunching talks on the WTO's stalled Doha round at the G-20 meeting. Ms. Ashton said U.S. support for completing a new global trade deal would boost confidence in world markets.
    The carbon tax issue is important to energy-intensive U.S. industries -- including paper, cement, fertilizer, steel and glass manufacturers -- that worry that costs imposed by climate-change laws will put them at a disadvantage to rivals in nations that aren't bound by similar requirements.
    European Union officials are considering a similar tariff, prompting some developing nations to caution that trade restrictions run the risk of retaliatory action.
    China is seeking to require importers of its carbon-intensive goods to bear the emission costs, concerned that targets such as those proposed by the U.S. would cripple the nation's growth as an industrializing nation.
    The U.S. does agree with China that an international agreement should be based on a principle of "common but differentiated responsibilities" that allows a less-stringent and longer-term flexibility for developed countries. Obama administration officials also agree that developed countries need to help to finance the technology transfer for low carbon energy and efficiency measures.
    Write to Ian Talley at ian.talley@dowjones.com and Tom Barkley at