By David John Schmidt
In Europe, it has been announced that the European Union wants to slash carbon emissions by 2050 to pre-1990 levels; that is an astounding 80 percent cut. However, Europe presently is on track to only accomplish this goal halfway, and “the European Parliament voted for a plan to raise the cost for firms to produce carbon” (The Economist). In addition, in regards to the call for raising the cost to produce the Greenhouse gas ‘carbon’, the European Union has incited the calls for the institution to propose an excise on the emissions produced in the ports throughout Europe. Yet, critics believe at best, that the levy will only curb the emissions halfway and at worst they predict a potential trade war. A trade war is defined as a situation in which countries try to damage each other’s trade, typically by the imposition of tariffs or quota restrictions.
Currently, the political institution, “The EU”, has tried to raise the price of carbon by the cutting of the emissions allowances given to European corporations. One such example is the EU’s first ever levied border duty on the greenhouse gas carbon, mainly aimed on the cement industry. Likewise, the steel industry feels that their omission to this arrangement is quite one-sided. Also, one of Europe’s biggest steelmakers, ArcelorMittal’s Chief Executive has voiced his full backing of the levy. Moreover, in the United States, similar proposals are making their way into the halls of the Legislative branch. Furthermore, under the proposals made by the European Union, European steel producers would have to pay up to Thirty-Two U.S Dollars’ worth in fees to emit an estimated ton of greenhouse gases, which in euros is approximately Thirty Euros. An Economist who works in an organization known as OECD has offered some insight into the proposal. “It’s wonderful in theory, in reality it’s very problematic” (The Economist).
Consequently, there are known issues with the implementation of this agenda, which is how one would estimate the amount of greenhouse gases emitted from imports. Also, for that matter, some countries might find loopholes in the policy where they can withhold that information and not have to pay their dues. Overall, the main concern with many economists, corporations, and countries is the potential for a tariff war. In conclusion, many political scientists, along with economists, believe that a global carbon price would offer the best result and the best result economically speaking.