The way I see it, the major barrier to countries implementing carbon taxes is the fear their economic competitors won’t do the same, therefore hindering their economic growth needlessly. A valid concern.

Why don’t some nations build an ‘opt in’ style Free Trade Agreement that allows any country to join as long as they prove they have implemented and enforced a carbon tax. Those countries then have high financial incentives to only trade within the ‘carbon tax block’ and any country outside is at a serious trade disadvantage.

I’ve (quickly) looked and have not found anything like this proposed (which is frankly crazy).

Would you support your country jumping into this FTA?

What are the unforeseen downsides or objections to a plan like this?

  • YondozaOP
    1·
    1 year ago

    When people hear “free trade” they think of a system that waives all import duties, which may or may not be what is desired here. I can think of some bad actors passing a “carbon tax” just to get all the other duties on their goods dropped.

    Honestly, this is exactly what I was thinking when I formulated this question. While I agree with your comprehensive list, we may not have time for that. Even a 10 or 20 year deal of a “carbon tax free trade agreement” may be all we need to course correct. If it is effective (at curbing carbon emission and as a political tool) a new FTA with the qualifications you listed could be crafted. The more qualifications, the slower nations would be to adapt/enroll and I’d be wary of adding too many if the goal is fast action now.

    Bad actors’ intent matters little, as long as their actions align with world goals.