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Illustration: Sarah Grillo

In a recent speech, French President Emmanuel Macron raised a proposal for an EU–wide carbon “tariff” on goods coming into the bloc from countries without a price on carbon — a way to lead by example on climate while still leading through advantage for industry.

Why it matters: The plan could prompt other countries to adopt carbon pricing in part to avoid disadvantaging their goods and services. In the best case, it could lead to a rapid increase in the amount of global emissions exposed to a carbon price, without creating excessively harmful economic distortions.

The catch: Border adjustments are delicate mechanisms and will have to be designed with the game theory of other countries' likely responses in mind. In the worst case, such a charge might be contested before the World Trade Organization.

  • Even if the WTO validated the policy, a supportive ruling disregarded by key economies such as the U.S. would damage the organization's credibility in exchange for no meaningful climate action.

Where it stands: The system Macron discussed would be incredibly complex and could take years to develop. But one thing is sure: Efforts by various countries to advance a "green" industrial policy, in all its forms, are only set to expand.

  • France's idea has been unsuccessfully floated before, but it's noteworthy that Europe’s largest business lobby recently dropped its opposition.
  • ArcelorMittal, the steel and mining company, is also calling for a "green border adjustment" that would protect it from imports of steel not currently subject to EU carbon fees.
  • The U.S. could expose itself to trade sanctions for its failure to ratify the Kigali Amendment to the Montreal Protocol, an environmental agreement supported by American industry and many Republicans.

What to watch: Although climate change is polling as an increasingly important issue for both Democratic and Republican voters ahead of next year's U.S. presidential elections, candidates have said relatively little about the intersections of climate and trade policy.

  • A recent proposal by John Hickenlooper to integrate climate goals into U.S. trade agreements may yet mark the beginning of a shift for the 2020 race.

David Livingston is deputy director for climate and advanced energy at the Atlantic Council Global Energy Center.

Go deeper

9 mins ago - World

Putin to demand legal guarantee against NATO expansion in call with Biden

Biden and Putin meeting in Geneva in June. Photo: Mikhail Metzel\TASS via Getty Images

Russian President Vladimir Putin is demanding a legally binding guarantee that NATO will not expand east — including to Ukraine — and plans to raise the issue in an upcoming phone call with President Biden, according to the Kremlin.

Why it matters: Russia has massed more than 94,000 troops on the border with Ukraine and could be preparing for a large-scale invasion at the end of January, Ukraine's defense minister said Friday.

A tale of two jobs reports

Source: Bureau of Labor Statistics; Chart: Axios Visuals

Whatever you think about the economy, you’ll find something in this morning’s conflicting jobs report to reinforce your views: America's job market is white-hot and the labor market is anemic.

Between the lines: The conflict comes from the two separate surveys the government uses to compile the report.

Elon Musk's mega-billion bounty

Photo: Patrick Pleul/picture alliance via Getty Images

Here's how insanely rich Elon Musk is: He has unloaded $10 billion of his stock in the past month — and could do that 15+ more times given his silos of shares.