How Carbon Dividends
U.S. climate policy should reward our
manufacturers for doing the right thing.
Under today’s trade rules, U.S. manufacturers get no credit for their lower carbon operations compared to many overseas competitors.
When low-cost goods made with high emissions come into our market, it undercuts U.S. manufacturers who have made investments to cut emissions. For example, when steel rebar is produced in America to reinforce concrete, it typically generates less than a quarter of the carbon emissions per ton than rebar manufactured elsewhere in the world.
Yet our steelmakers are forced to compete against many producers overseas who operate with fewer environmental standards. Our manufacturers shouldn’t be penalized for being so clean.
America already has a significant carbon advantage: it produces goods with far fewer emissions than its major trading partners. We just need to unlock it.
A border carbon adjustment (BCA) charges the same domestic U.S. carbon fee on imports at the border, so U.S. manufacturers operate on a level playing field.
U.S. manufacturers receive a rebate for any carbon fees they paid when they export goods out of the country.
The U.S. economy is 44% more carbon-efficient than the world average. It is 3x more carbon-efficient than that of China and nearly 4x as efficient as India. We should get credit for it.
A BCA backed by an economy-wide carbon fee rewards U.S. manufacturers for their efficiency and gives them the incentive to build on it.
America’s carbon advantage extends to a range of U.S. sectors.
When U.S. manufactures outcompete less efficient global producers, they grow and create jobs.
We invite you to learn more