EU’s Carbon Dumping Fee Spotlights Key Tool to Curb Dirty Imports

BRUSSELS -- Today, the European Commission, the executive branch of the European Union, presented its plan for a carbon border adjustment mechanism. This carbon dumping fee on imported goods made with a high degree of climate pollution is part of the EU’s commitment to cut emissions 55 percent by 2030 and become climate neutral by 2050.

The Sierra Club supports a carbon dumping fee that:

• is designed jointly by unions, environmental groups, other key stakeholders, legislators, and administration officials, with input from allies across borders;

• focuses on trade in cement, iron and steel, aluminum, chemicals and petrochemicals, and pulp and paper, which make up the brunt of industrial climate pollution; 

• imposes a fee on the additional carbon that goes into a given imported good, compared to domestic levels; 

• is calculated by climate economists on an independent panel; and

• is accompanied by a “climate peace clause” at the World Trade Organization to ensure that outdated trade rules do not inhibit such climate-friendly trade policies.

Read more details on how a carbon dumping fee should be designed in this proposal.

In response, Sierra Club Living Economy Program Director Ben Beachy released the following statement:

“To date, none of America’s trade deals make any mention of climate change, much less include binding climate standards. This climate loophole eliminates good jobs and undercuts our climate goals by making it easier for corporations to shift their most polluting plants to countries with lower wages and weaker labor and environmental standards. 

“A carbon dumping fee is one important tool in the toolbox for establishing a new, climate-friendly trade model that supports good jobs, manufacturing renewal, and climate action. Properly designed, a carbon dumping fee could help slow the race to the bottom in climate action and even spur a race to the top. An equitable carbon dumping fee could make corporations think twice about outsourcing factories to exploit weaker standards abroad while creating a strong incentive for all countries to meet their climate goals.

“The Sierra Club welcomes efforts on both sides of the Atlantic to align climate and trade policies, and we look forward to working with policymakers and allies across borders to develop an equitable carbon dumping fee as part of a new, climate-friendly trade model.”