Local View: Carbon fee in US could help reduce emissions worldwide

Did you know that U.S. industry is considerably more carbon-efficient than its international competitors? We still use gobsmacking amounts of fossil energy, most of which becomes waste heat without doing any work, but it is estimated that 75% of imports into the U.S. come from countries which are even more carbon-intensive.

This opens an important opportunity to reduce foreign greenhouse emissions — and our own.

Preferably, we would impose an increasing carbon price on ourselves and charge importers that price on the carbon content of their carbon-intensive goods. The World Trade Organization clearly prefers this method, which reduces legal risk. The money collected could be used to pay down the cost of decarbonization or to compensate our exporters when exporting to a country without carbon pricing.

Or we could do something like the Citizens’ Climate Lobby’s carbon-fee-and-dividend plan. Two of our most important trading partners, Canada and the European Union, have a rising carbon price and have now imposed an excise tax on the carbon content of U.S. exports to them known as a “carbon border adjustment mechanism,” or CBAM. The Canadians and Europeans have no desire to see their carbon-intensive industries move to the U.S. where there is no price on carbon. The CBAM will become more and more painful for our exporters over time, and that will negatively impact American jobs.

Unfortunately, there has been little appetite in Congress for carbon pricing, and so work in Congress is centering on producing a CBAM lookalike that would take advantage of the estimated efficiency advantage American industry has wrested from its processes. This would essentially be a carbon price to level the playing field with Canada and the European Union.

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So, what about China? China is a fascinating case. The Chinese have put up so much solar and wind that it dwarfs what the rest of the world is doing. At the same time, China has seemingly made a decision to double down on coal power plants. China’s steel plants have also historically used much more coal per ton of steel than U.S. plants. Dissuading China from using more coal is essential to preserving a liveable climate for us all. A CBAM can help.

We also need to up our own game, and if we fail to steadily decarbonize, our relative advantage will erode over time with regard to our trading partners.

Before a CBAM can be put into action, however, we need to nail down the carbon emissions from certain EITE (Energy-Intensive, Trade-Exposed) industries such as steel, concrete, fertilizer, and petrochemicals.

Right now, a bipartisan bill is working its way through the U.S. Senate, called the PROVE IT Act, which would direct the Energy Department to calculate the carbon intensity of the above industries so a CBAM can be put in place. It will soon be introduced in the U.S. House as well.

You can help make the difference. Please call our members of Congress and ask them to support the PROVE IT Act: Call Sen. Amy Klobuchar at 612-727-5220, Sen. Tina Smith at 651-221-1016, and Rep. Pete Stauber at 218-481-6396.

Dr. Eric Enberg is a member of the Northland Chapter of Citizens' Climate Lobby, the Duluth Climate and Energy Network, and Healthcare Professionals for a Healthy Climate. He practices family medicine in West Duluth.

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