Climate Change Policy
Border Adjustment Key to U.S. Trade and Manufacturing Jobs
Climate change is the most important environmental issue facing the United States and the world. The Intergovernmental Panel on Climate Change has concluded that the “scientific evidence for warming of the climate system is unequivocal” (NASA Jet Propulsion Laboratory 2009). Rising emissions of carbon dioxide and other greenhouse gases (GHGs) are responsible for rising global temperatures, shrinking global ice masses, rising sea levels, and increasing the intensity of tropical storms. Continued change, aside from the obvious cost in human lives, would also entail potentially enormous economic costs. It is essential for the United States to develop strong and effective GHG regulations and to negotiate an international treaty to bring about global reductions in GHG emissions.
A well-designed climate policy can support the economic recovery, and green investments can support millions of new jobs, starting with the creation of over 1 million new jobs in the next two years (Bivens, Irons, and Pollack 2009) and ensuring that U.S. manufacturing comes back stronger and cleaner than before.
Poorly designed climate change policies, however, could slow or halt the recovery of significant segments of U.S. manufacturing—as identified in this report— and could even lead to increased global production of GHGs. It is essential for the United States to enact climate change policies that ensure a strong, broad-based recovery of the economy and encourage the growth of domestic manufacturing. One of the keys to achieving these goals is to include a border adjustment mechanism—a fee on the carbon content of goods imported from countries that do not restrict GHG emissions—in U.S. climate change policies.