In 1992, nearly 200 nations approved the United Nations Framework Convention on Climate Change. It mandated that nations work together “to prevent dangerous anthropogenic interference with the climate system”. Historically high-polluting industrial countries were given special responsibility to lead the transition to climate-smart energy and economics.
29 years later, the 26th annual Conference of the Parties (COP26) will meet in Glasgow with a focus on significantly upgrading national climate action commitments and securing universal support for moving to net-zero global heating pollution by mid-century or before. The Science-Based Targets Initiative and the Race to Zero carefully outline strategies for rapid up-front reductions to ensure all elimination of all net emissions by 2050.
The European Parliament recently voted by a wide margin to support the design and implementation of a Carbon Border Adjustment Mechanism (CBAM) as part of its long-term EU Green Deal, its strategy for achieving a prosperous zero-emissions economy. The CBAM would apply a fee to all goods entering the EU from countries without adequate pricing of global heating pollution.
Some nations—especially those that export carbon-emitting fuels and those without active carbon pricing measures in place—have suggested this idea is controversial, or should be a last resort. Under 20th-century conditions, this resistance would be understandable, but climate disruption is now an active and worsening crisis, undermining wellbeing and security around the world.
The CBAM is not a normal import tariff. It is not intended to disadvantage trading partners or secure an unfair advantage for domestic industries. It safeguards national sovereignty, prevents the pirating of critical industries by countries that decline to act on climate, and most importantly, creates an incentive to be part of a “carbon club of nations”.
Nations that price pollution and speed the transition to full-spectrum reliable clean energy solutions—as Canada is doing—would:
avoid the CBAM being imposed on their exports;
keep the revenues from pollution pricing for use at home—reinvesting in their own economies or distributing rebates to households;
co-lead the design and building of a sustainable future economy.
Each of these three benefits of joining the carbon club equates to a more solid foundation for the future prosperity of the nation in question.
The CBAM is an inducement to get started getting it right.
It is also a way of broadening the base of collective climate action.
That broader base of action will accelerate the timeline for decarbonization, crowd in the public, private, and multilateral finance needed to build new industries, and reduce the risk and cost of the transition for all.
Resistance to the creation of a carbon club is likely not viable for long. Under the 1992 Convention, all nations agreed there is a shared need “to prevent dangerous anthropogenic interference with the climate system”. The Paris Agreement made the commitment to action universal and signaled the need to avoid global heating above 1.5ºC.
The 1992 Convention and the Paris Agreement effectively require all nations to find a way to be part of the carbon club—to be allies in speeding the elimination of global heating pollution and to invest for a climate-smart, resilience-building future of shared prosperity. The timeline for getting on schedule to successfully avoid disaster is getting short. Globally, we need to cut emissions 45% to 50% by 2030.
Under Article 6 of the Constitution of the United States, the Convention is “the supreme Law of the Land”—equal to Constitutional law. Its mandate is binding on the United States, even if other nations have looser provisions in their own body of laws. The US has as strong an incentive as any nation to put effective national pollution pricing in place, and to institute its own carbon border adjustment.
It would have more influence than most, and could derive the greatest future benefits from a strong economy-wide price on carbon pollution, especially if it returns revenues to households. Such a policy would:
create millions of additional new jobs;
reduce incidence of particulate pollution, saving tens of thousands of lives;
increase household incomes;
diversify and revive local economies;
rebuild geopolitical credibility and clout;
and give the US its best chance at being the financial and technical leader of the clean economy of this century.
The COP26, which will be the 5th global negotiation since Paris, should include a universal commitment to achieve net-zero no later than 2050, and as soon as possible. It also provides an opportunity for all nations to respond to the known future pressure of the EU-CBAM by putting in place national climate policy that would avoid the carbon border adjustment and afford the fastest pathway to climate-smart, enhanced and sustainable economic prosperity.
The best-case economic recovery will be led by nations that join the new carbon club, to make sure net-zero pathways are active and achievable.