US Should Adopt Carbon Border Tax to Address Climate Change

As extreme weather events seem to punctuate the news on a weekly basis, the need to address global climate change continues to grow.

To that end, the EU last month passed a carbon border adjustment mechanism—a border-adjustment tax on carbon. A BAT attempts to tax a good based on where it’s consumed rather than where it’s produced. When applied to carbon, the goal is to offset the incentive for producers to evade a carbon tax in one country by producing goods in another.

The EU’s CBAM has set a precedent and provided cover that other nations are likely to ...