Environmental tariff - AbsoluteAstronomy.com

An Environmental tariff, also known as a green tariff or eco-tariff, is an import or export tax placed on products being imported from, or also being sent to countries with substandard environmental pollution controls. They can be used as controls on global pollution and can also be considered as corrective measures against "environmental races to the bottom" and "eco-dumping".

International trade vs. environmental degradation

There has been debate on the role that increased international trade has played in increasing pollution. While some maintain that increases in pollution which result in both local environmental degradation and a global tragedy of the commons
Tragedy of the commons
The tragedy of the commons is a dilemma arising from the situation in which multiple individuals, acting independently and rationally consulting their own self-interest, will ultimately deplete a shared limited resource, even when it is clear that it is not in anyone's long-term interest for this...

are intimately linked to increases in international trade, others have argued that as citizens become more affluent they'll also advocate for cleaner environments. According to a World Bank

World Bank

The World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...

paper:

"Since freer trade raises income, it directly contributes to increasing pollution levels via the scale effect. However, it thereby induces the composition (and) technique effects of increased income, both of which tend to reduce pollution levels".

Early tariff implementation proposal

Although the United States

United States

The United States of America is a federal constitutional republic comprising fifty states and a federal district...

has in the past been accused of dragging its feet on implementing tough new anti-pollution measures, it was the originator of a legislative proposal suggesting an environmental tariff be applied against exporting countries whose exports gained significant cost advantages due to less stringent environmental regulations. The proposed legislation was tabled as the International Pollution Deterrence Act of 1991 and was introduced in its Senate in April of that year.

Proposed International Pollution Control Index

A notable feature of the proposed U.S. International Pollution Deterrence Act was the international pollution control index it cited within its Section 5, which read:

INTERNATIONAL POLLUTION CONTROL INDEX

Section 8002 of the Solid Waste Disposal Act (42 U.S.C. 6982) is amended by adding the following new subsections at the end thereof:

`(t) The Administrator shall prepare, within one hundred and twenty days of the enactment of this section and yearly thereafter, a pollution control index for each of the top fifty countries identified by the Office of Trade and Investment of the Department of Commerce based on the value of exports to the United States from that country's attainment of pollution control standards in the areas of air, water, hazardous waste and solid waste as compared to the United States. The purpose of this index is to measure the level of compliance within each country with standards comparable to or greater than those in the United States. The Administrator shall analyze, in particular, the level of technology employed and actual costs incurred for pollution control in the major export sectors of each country in formulating the index.

Agitation against use of environmental tariffs

Environment tariffs were not implemented in the past, in part, because they were not sanctioned by multilateral trade regimes such as the World Trade Organization

World Trade Organization

The World Trade Organization is an organization that intends to supervise and liberalize international trade. The organization officially commenced on January 1, 1995 under the Marrakech Agreement, replacing the General Agreement on Tariffs and Trade , which commenced in 1948...

and within the General Agreement on Tariffs and Trade

General Agreement on Tariffs and Trade

The General Agreement on Tariffs and Trade was negotiated during the UN Conference on Trade and Employment and was the outcome of the failure of negotiating governments to create the International Trade Organization . GATT was signed in 1947 and lasted until 1993, when it was replaced by the World...

(GATT), a fact which generated considerable criticism and calls for reform.

Additionally, many foreign factory owners in newly industrialized countries

Newly industrialized countries

The category of newly industrialized country is a socioeconomic classification applied to several countries around the world by political scientists and economists....

and underdeveloped countries saw the attempts to impose pollution controls on them as suspicious...

"...seeing it as a threat to their growth and fearing that developed countries would attempt to export their preferences for pollution control or to place 'environmental' tariffs on imports from countries with lower standards."

International trade vs. environmental degradation

Early tariff implementation proposal

Proposed International Pollution Control Index

Agitation against use of environmental tariffs

Further reading