The United States and the European Union have recently implemented ambitious domestic greenhouse gas reduction programs. But reducing global emissions will not be possible unless China and other middle-income emitting countries cut their emissions. And the different approaches the EU and U.S. have taken create a risk of policy and trade conflicts that divert both from the larger goal of limiting world emissions.
Today, the Progressive Policy Institute (PPI) released a new report titled, “Alliance for Clean Trade: A Framework Proposal for a New Climate and Trade Alliance Between the U.S., EU, and Allies” outlining a new low-emissions trade deal that would help the United States, European Union, and their allies harmonize approaches to transition to clean energy and incentivize China and other nations to reduce emissions.
Report authors Paul Bledsoe, Strategic Advisor at PPI and a former Clinton White House climate official, and Ed Gresser, Vice President and Director for Trade and Global Markets and former Assistant U.S. Trade Representative for Trade Policy and Economics, lay out a policy framework where the U.S., EU, and other G7 countries set emissions standards for high-carbon industries, and impose a fee applying to both local production and imported goods with high emissions rates. This trade agreement would help countries meet their emissions goals, avoid imposing trade penalties on each other, and give China and other large emitting, middle-income countries incentives to follow suit.
“The Alliance for Clean Trade (ACT) proposes that the U.S. and our G7 allies ban together to create powerful trade incentives for China and other nations to cut their emissions, so global emissions can fall and we can prevent the worst of climate change impacts,” said Paul Bledsoe. “Without new economic incentives to reduce emissions, our world will see dangerous climate impacts and rising household costs that will soon swamp our ability to adapt and protect public safety at home and around the world. Our framework helps provide a pragmatic, yet ambitious way forward, while also complying with World Trade Organization rules.”
“The world has just had a shining example of U.S.-Europe-Asian collaboration to develop new technologies and products needed to meet a worldwide threat in the case of the COVID-19 vaccines. We need a similar collaborative effort to meet the challenge of climate change, and to induce the large middle-income economies that are the source of new net emissions to become more efficient,” said Ed Gresser. “This paper is an effort to outline such a program, through trade incentives based on common charges for over-production of carbon in the highest-emissions industrial sectors.”
The framework seeks to address three major problems with current policies and other proposals:
Read and download the report here:
The Progressive Policy Institute (PPI) is a catalyst for policy innovation and political reform based in Washington, D.C., with offices in Brussels, Berlin and the United Kingdom. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. Learn more about PPI by visiting progressivepolicy.org.
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Media Contact: Amelia Fox, afox@ppionline.org
