Mar 12, 2021 - Energy & Climate

John Kerry says EU carbon border tax adjustment should be a 'last resort"

Ben Geman

Illustration of a green round table with the Earth as the top of the table. — Illustration: Aïda Amer/Axios

President Biden's climate envoy John Kerry "warned the EU that a carbon border tax adjustment should be a 'last resort,'" the Financial Times reports (subscription).

Why it matters: The official statement following a meeting between Kerry and European officials shows that while the U.S. and EU are now broadly aligned on climate, harmony on policy specifics can be trickier.

Driving the news: Kerry spoke to the FT at the close of his meetings. From their piece...

The former secretary of state said "he was 'concerned' about Brussels’ forthcoming plans for a carbon border adjustment mechanism and urged the EU to wait until after the COP26 climate change conference in Glasgow to move forward."
Kerry said a border tax "does have serious implications for economies, and for relationships, and trade."

Catch up fast: Border adjustments are meant to ensure industries in regions with strong emissions-cutting policies don't face a competitive disadvantage.

Such trade measures could also avoid simply moving emissions from place to place, or "carbon leakage."
European Commission's Frans Timmermans said earlier this year that it's a "matter of survival" for European industries.

The intrigue: Biden's platform called for "carbon adjustment fees or quotas on carbon-intensive goods from countries that are failing to meet their climate...obligations," and name-checked China.

But the future of those plans is pretty vague right now.

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John Kerry says EU carbon border tax adjustment should be a 'last resort"

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