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Transcript of Changing Climate for Carbon Taxes: Who’s Afraid of the WTO?
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CLIMATE & ENERGY PAPER SERIES 2013
CHANGING CLIMATE FOR CARBON TAXES
Whos Afraid of the WTO?
JENNIFER HILLMAN
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2013 Te German Marshall Fund o the United States. All rights reserved.
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rom the German Marshall Fund o the United States (GMF). Please direct inquiries to:
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Changing Climate for Carbon Taxes
Whos Afraid of the WTO?
Climate & Energy Policy Paper Series
July 2013
J H
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Changing Climate for Carbon Taxes 1
Introduction
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The key is to struct
any accompanying
border measure as
a straightforward
extension of the
domestic climate p
to imports.
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Changing Climate for Carbon Taxes 3
The Simple Path
1
Complications only
should policymaker
choose to go beyon
a tax applied to any
all domestic produc
or users of carbon
tax or place restricton foreign goods or
companies.
Carbon Tax on U.S. Production
and Use of Fossil Fuels
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Application of the Carbon Tax to Imports?
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Adjustment: Questions and Answers (But More of the Former),Bk P, IISD, O 9.
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The German Marshall Fund of the United States4
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Changing Climate for Carbon Taxes 5
Adding Complications:
Equivalent Tax on Imports2
How other member
of the WTO would
respond to such a t
on their imports wo
likely depend quite
significantly on how
the tax was designeand whether other
countries perceived
their rights under th
WTO Agreements w
violated.
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http://www.ssrn.com/abtract=2026879http://www.ssrn.com/abtract=2026879 -
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The German Marshall Fund of the United States6
The simplest and most
likely WTO-consistent
path for policymakers
would be to impose a
carbon tax on products
both domestic and
imported at thetime of their sale,
istribution, or transfer.
Indirect versus Direct Tax
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fund), L/675, J 7, 987, BISD S/6 .5 .5..4. C k-v v, v w j . I w .T, BTA w .
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Changing Climate for Carbon Taxes 7
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The farther
policymakers move
from a tax on produ
or the consumption
products, the murk
becomes as to whe
a domestically apptax can be legally
assessed on impor
under the GATT.
-
7/30/2019 Changing Climate for Carbon Taxes: Whos Afraid of the WTO?
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The German Marshall Fund of the United States8
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4 R WTO T B T (TBT) A v v w v . A B R, Dominican Republic
Measures Affecting the Importation and Sale of Cigarettes, WT/DS/AB/R, M 9, 5; A . TBT A- w v . United States Measures
Affecting the Production and Sale of Clove Cigarettes, WT/DS46AB/R, 74; United States Measures Concerning the Impor-tation, Marketing, and Sale of Tuna and Tuna Products, WT/DS8/AB/R, 5.
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Changing Climate for Carbon Taxes 9
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Should the WTO
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do not permit bordeadjustments for en
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be well positioned t
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The German Marshall Fund of the United States10
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Past cases would
suggest that
demonstrating that a
x on carbon emissions
assessed both
domestically and at the
order on imports wouldfit within either or both
of the requirements of
XX(b) or XX(g).
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Changing Climate for Carbon Taxes 11
The problem for the
United States will b
that differentiation
the BTA based on t
country-of-origin of
imports would mos
likely result in a vioof the GATTs mos
favored nation (MF
principle.
A Further Complication:
Giving Credit Where Credit is Due?3Tax All Like Products Alike
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The German Marshall Fund of the United States12
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Changing Climate for Carbon Taxes 13
Without such an
exemption, if few
countries impose th
own carbon taxes
or carbon reduction
schemes, then U.S.
exporters would beat a competitive
disadvantage.
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F 6 A II SCM A v:I - , , , w .
A Final Complication: Rebates to
U.S. Producers on Their Exports4
-
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The German Marshall Fund of the United States14
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Use of Import Tax Revenues
5
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j k - , . US-Shrimp.
A significant allocation
to developing country
climate efforts would
help demonstrate
that the United States
eeks to use the BTA to
ombat climate changerather than protect its
own industries.
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Changing Climate for Carbon Taxes 15
Conclusion
6
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O F F I C E S
Washington Berlin Paris BrusselsBelgrade Ankara Bucharest Warsaw Tunis
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