Retailers such as Target and Walmart and other companies that rely on imported goods and materials in their supply chain have suggested that a
border tax adjustment could increase their costs to the point of eroding profit margins.
CLC proposes a
border tax adjustment, with fees imposed on imports from nations "without comparable carbon pricing systems," and with rebates to exporters for sales into nations without such policies.
There are further problems with this proposal: how should such a
border tax adjustment system work in practice and how should the customs administration determine the individual tariffs for a wide variety of carbon-intensive products?
(3.) See infra Part IV (analyzing
border tax adjustments and benefits of promoting renewable energy).
WHY
BORDER TAX ADJUSTMENTS ARE PROPOSED IN CONJUNCTION WITH
Corollary 1: To be WTO-consistent, a
border tax adjustment cannot be based on the level of carbon embodied in the foreign produced final good, implying that [t.sup.b] [menor que o igual a] [g.sup.e], even if foreign production of the final good is more carbon-intensive f'([x.sup.U.sub.2]) > f'([x.sup.U.sub.1]).
TABLE 4 Energy Sector and All-Economy Impacts under Alternative Carbon Mitigation Price Signal Only Global Domestic Trading Market reforms No No Tax shifts No No Contribution from trading None Unlimited Sinks None Full
Border tax adjustments, fossil Yes Yes fuels
Border tax adjustments, other No No industries Domestic carbon price, $/tC 230 33 International carbon price, $/tC 33 Economic efficiency of climate policy GDP impact rel.
It is generally accepted that taxes directly levied on products are eligible for
border tax adjustment. Thus, GATT rules pose no serious obstacle to product-related environmental policies[8].
For example,
border tax adjustments, or BTAs is an important part of the changes trade policies, which imparts taxes on goods imported from countries and do not impose any rules or regulations to control emissions from various manufacturing companies.
It might have been because Canada is making some real progress on carbon pricing, or because Sudbury has been so successful in its regreening and mining supply sector, or because I've given a few talks for the Citizens' Climate Lobby on carbon taxes and
border tax adjustments.