The European Union and the United States Express Disagreement on Climate Strategy

John Kerry, the United States special presidential envoy for climate, conveyed concern regarding Brussels’ plans for trans-Atlantic carbon tax

Joe Biden’s special climate envoy, John Kerry, warned the European Union that the introduction of a cross-border carbon tax should be a “last resort” as it would have “serious implications for economies, and for relationships, and trade. I think it is something that’s more of a last resort, when the possibilities of achieving emission reductions are exhausted,” commented Kerry during his four-day European visit aimed at examining the mood before the United Nations’ November climate talks.

Kerry, speaking to the Financial Times, expressed concern regarding Brussels’ plans for the introduction of a carbon tax. He insisted that the EU must wait until the climate conference in Glasgow before taking any action.

’Precise Targeting’

This mechanism is the core of the EU’s “green” strategy, to be unveiled in June. Brussels’ plans will employ a tool that will use “precise targeting” so that the exports of countries that have not made a commitment towards carbon neutrality by 2050 will suffer. Steel and cement exports from Eastern Europe, Turkey and North Africa will initially be affected.

The EU called for a common strategy that includes carbon trading and a carbon tax as well as a new taxonomy regarding “green” regulatory standards and definitions. Kerry, however, suggested that Washington is likely to act independently. Kerry’s European trip constituted one of the new presidential administration’s first foreign trips, and is indicative of the administration’s focus on the climate crisis. Washington and Brussels are working on a common strategy before the Glasgow conference; they will insist that China reduce its emissions at a more rapid pace.

Besides the trans-Atlantic carbon tax there are conflicts regarding the green taxonomy. According to the French minister of the economy and finance, Bruno Le Maire, the U.S. and the EU should have a united taxonomy guaranteeing identical green standards. He added that it would be regrettable to have, in the end, two different sets of regulations.

“I suspect that the U.S. Treasury […] will have a lot to say about exactly where we are heading in regards to […] the taxonomy, green bonds and other things. It will be imperative for the U.S. to weigh in, either with its own taxonomy […] or of course work with other countries. Obviously, the United States has strong feelings about not wanting excessive regulation,” responded Kerry.

Zero Net Emissions Target

Kerry called on the EU to refrain from instituting a trans-Atlantic carbon tax before the climate summit in November. He insisted that the EU must wait until after the COP26 climate change conference in Glasgow before moving forward and that tax changes are currently not necessary.

Kerry added that the Glasgow summit would be successful if all parties agreed to a framework for zero net emissions.