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Border Tax Adjustments

MCLI Recommendation: “Congress should use carbon-based border tax adjustments to address leakage concerns as part of a broad climate change policy that may include a cap-and-trade scheme. Congress should include border tax adjustments that comply with GATT Articles I and III and the Agreement on Subsidies and Countervailing Measures in a comprehensive carbon tax or other broad climate change policy.”

LPDD Recommendation: “Congress should avoid unilateral measures that distinguish between domestic goods and services from ‘like’ imports unless they can show that these goods and services are not competitively substitutable.”

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12 resources

Resource Congress

Report, Optimal environmental border adjustments under the General Agreement on Tariffs and Trade

Iowa State University’s Economics Dept. authored a 2018 paper, Optimal environmental border adjustments under the General Agreement on Tariffs and Trade, arguing that border adjustments should be pric...
Resource Executive Branch

RFF Report, Policy Guidance for US GHG Tax Legislation and Regulation: Border Tax Adjustments for Products of Energy-Intensive, Trade-Exposed and Other Industries

This report describes how border adjustments set up around a greenhouse gas tax and an appropriately designed greenhouse gas index can be framed in a fashion analogous to value added taxes (VAT) that ...
Resource Congress

Proposed American Clean Energy and Security Act of 2009

The proposed American Clean Energy and Security Act of 2009 (“Waxman-Markey”) would have included a form of border carbon adjustment at Section 401 of Part IV of the bill. The proposed adjustment meas...
Resource Congress

Report, Designing Border Carbon Adjustments for Enhanced Climate Action

Climate Strategies’ 2017 paper, Designing Border Carbon Adjustments for Enhanced Climate Action, reviews past border carbon adjustment proposals and offers design principals and recommendations on que...
Example States and State Governments

California ETS Border Carbon Adjustment

California’s emissions trading system requires carbon border adjustments for imports of electricity from jurisdictions without a carbon trading framework. First deliverers of imported electricity are ...
Resource Foreign

Global Ecolabelling Network

The Global Ecolabelling Network supports the development of third-party certified ecolabeling systems, such as ISO 14024, while also supporting other types of self-declaration and voluntary programs. ...
Example Congress

Proposed Foreign Pollution Fee Act

Introduced in November, 2023, the proposed Foreign Pollution Fee Act marks a rare Republican proposal to price carbon pollution — from foreign imports. The new bill would impose a fee on certain indus...
Resource Congress

Report, Changing Climate for Carbon Taxes: Who’s afraid of the WTO?

The German Marshall Fund’s 2013 paper, Changing Climate for Carbon Taxes: Who’s afraid of the WTO?, explores the basic architecture of a carbon border tax adjustment, as well as complications includin...
Resource Congress

Report, Greenprint

Chapter 5 of the Center for Global Development’s 2012 paper, Greenprint, models the impacts of four different carbon border adjustment policy scenarios.
Resource Congress

Report, Framework Proposal for a US Upstream Greenhouse Gas Tax with WTO-Compliant Border Adjustments

Resources for the Future’s 2018 paper, Framework Proposal for a US Upstream Greenhouse Gas Tax with WTO-Compliant Border Adjustments, proposes a framework for a US climate policy with border adjustmen...
Resource Congress

Report, Making Border Carbon Adjustments Work in Law and Practice

The Tax Policy Center’s 2018 paper, Making Border Carbon Adjustments Work in Law and Practice, addresses issues relating to the creation of border carbon adjustments as part of a carbon tax, including...
Resource Foreign

EU Carbon Border Adjustment Mechanism

After several years of development, in April 2023, the European Parliament approved a Carbon Border Adjustment Mechanism (CBAM). In essence, the CBAM will tax the import of products that would be subj...