2012: First trade war over climate change

On January 1, 2012, something unprecedented will happen: The first global carbon tax will go into effect. It will affect only airlines that fly in and out of Europe, but since that's pretty much every airline on the planet, not a single flight to the continent will escape its reach. And countries including the US, China and India are all threatening to declare a trade war over the issue.

The tax is straightforward. Any flight into or out of an EU member country must buy carbon credits sufficient to cover the greenhouse gasses emitted during the flight. By including carriers that aren't based in the Europe in the scheme, the EU is levying what is in effect the first international carbon tariff.

This is a bigger deal than most people realize, because it points the way to a future in which the EU could put a tax on any good or service coming into its borders, proportional to its greenhouse gas impact. Collectively, the EU is the single biggest economy on the planet, which means it has enormous power to shape the policies of its trading partners.

Which is precisely why they're all ready to levy their own punitive taxes in response. If Americans flying into Europe end up paying their share of their own carbon credits, the measure will have accomplished the impossible: forced U.S. citizens to pay to offset their impact on the climate.

What's amazing is that this will be a contentious issue at all. The impacts of climate change's unrelenting assault, present and future, are now beyond question, scientifically, and yet of all the countries in the world, only the EU has even proposed a system that would make everyone on our shared planet accountable.

via Allianz

Photo: Luis Argerich

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