Carbon border taxes are also designed to protect domestic manufacturing. If an individual country commits to cutting emissions domestically, it runs the risk that, for instance, its steel and cement factories will face higher costs and be at a disadvantage to foreign competitors with looser environmental rules. Steel and cement production could shift overseas as a result, undercutting the climate policy, since foreign factories would be emitting just as much or more carbon dioxide elsewhere.
“This legislation will assert American leadership on the climate crisis, but we also can’t be ‘Uncle Sucker’ where other countries, led by China, take advantage of what we are going to ask our country to undertake,” Mr. Markey said.
Senator Chuck Schumer of New York, the majority leader, said he included the tariff because “it prevents other countries from polluting.”
China is the world’s top emitter of greenhouse gases that are driving global warming, followed in descending order by the United States, the European Union, India, Russia, Japan, Brazil, Indonesia, Iran and Canada.
Scientists have warned that the world needs to urgently cut emissions if it has any chance to keep average global temperatures from rising above 1.5 degrees Celsius, or 2.7 degrees Fahrenheit, compared with preindustrial levels. That’s the threshold beyond which experts say the planet will experience catastrophic, irreversible damage. Temperature change is not even around the globe; some regions have already reached an increase of 2 degrees Celsius.
President Biden has promised to cut the United States’ greenhouse gas emissions by 50 to 52 percent below 2005 levels by 2030. The White House did not immediately respond to a request for comment. A Senate leadership aide said the Biden administration has raised the idea of a carbon border tax with lawmakers. Earlier this year, it floated the notion of taxing carbon-intensive imports as part of a broader trade policy.
The budget resolution is yet to be written. That work will be done by various committees in the coming months.