The January 4th The Financial Times editorial "The Greening of Globalisation" argued that discussion on carbon tariffs is "rhetorical protectionist sabre-rattling to actual restrictions on international trade in goods and services".
Gernot Wagner and I argued against this position in our letter to the editor. Our two key messages are:
- While negotiating multi-lateral agreements on CO2 emission reductions is very complex, CO2 tariffs provide means for (unilateral) action
- We propose to not sink the tariffs in government coffers, but directly invest them into CO2 emission reduction projects in the producing / exporting countries, creating a win-win situation.