The Smart Way to Reduce Emissions and Outmaneuver Our Rivals

The Washington Post

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Most nations won’t risk their own economic well-being in the hope of reversing what is clearly a global problem. And it would be a mistake for the United States to do so without adopting a plan that compels other large carbon-emitting nations to do the same.

The Biden administration is right to recognize the risks of climate change, but it has so far failed to come up with a way to ensure against the risk without ceding a competitive advantage to China and other nations. Republicans in Congress are right to worry about U.S. competitiveness. But by failing to meaningfully engage on the climate issue, they are handing Democrats a political advantage and missing an opportunity to strengthen our economy against international rivals.

However, there is an approach that would serve all interests — the interests of Republicans and Democrats, as well as the interest of progress on both climate change
and U.S. competitiveness. It lies in leveraging an underappreciated strength of our economy: our success in low carbon-emission production.

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This is a far better route than forcing the United States to wean itself from fossil fuels (while other nations fail to do so) because it harnesses a set of critically important strategic assets of our country: our abundance of affordable and cleaner energy, and our unmatched powers of innovation.

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As much as some might like, we can’t force these large emitter nations to impose restrictions such as those being considered in the United States. So, a critical component of our plan is a feature that would rebate to U.S. manufacturers their fees on exports to any nation without a similar carbon program. If any country refused to go along, it would have to pay a penalty to send its goods into the United States. Access to the world’s largest market would obviously put pressure on China and other nations to reduce their own emissions — or pay a surcharge to sell their goods in the United States.

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The economic upside here is unmistakable. U.S. steelmakers, for example, are far more efficient in low-carbon production than their major global competitors, according to a recent study commissioned by the Climate Leadership Council. By applying a carbon fee to domestic and imported steel, the U.S. industry would win across the board. Overall, the study found, the U.S. economy is 40 percent more carbon-efficient than the world average, and nearly every U.S. industrial sector enjoys a carbon advantage over most of our key trading partners.

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