Originally Published July 20, 2023
Trade, which is responsible for a quarter of global carbon emissions, presents a promising opportunity for aligning global market incentives with international climate goals. Interest is growing around a set of policies designed to favor carbon efficient manufacturing. One set of tools under consideration by larger economies would begin charging imported goods based on their emissions intensity. Carbon intensity import fees have the potential to reward decarbonization efforts and ensure that imported products are aligned with national climate ambition. As with all major policies, the design and details matter greatly.