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Europe Might Slap a Climate Tax on Us. Good.

The United States fully deserves to face tariffs for its failure to pass climate legislation.

Ursula von der Leyen speaks in front of a screen reading "Green Deal."
JOHN THYS/AFP/Getty Images
European Commission President Ursula von der Leyen unveils proposals on July 14 in Brussels to transition to a low-carbon economy.

The European Union Wednesday unveiled a suite of climate policies intended to cut emissions by 55 percent of 1990 levels by 2030. The plans include higher carbon prices, a bloc-wide coal phaseout and stopping the sale of fossil-fueled internal combustion engine cars by 2035. Also among its proposals—which member nations will debate in the coming weeks—is a “carbon border adjustment mechanism” that would impose fees on goods imported from non-EU countries with weaker climate laws. That could include the United States. Arguably, it should.

How long can the U.S. continue not to pass climate policy and face zero international consequences? In addition to blocking climate policy domestically, the U.S. also periodically takes a sledgehammer to efforts at international cooperation: first torpedoing the Kyoto Protocols under George W. Bush and then forcing the world to build a new global framework, the Paris Agreement, that obscures questions of historical responsibility. It left that, too, before rejoining this year. (As of 2015, the U.S. was responsible for 40 percent of the world’s excess carbon emissions.) The European Union isn’t exactly a climate hero, but its version of not doing enough is very different from our own. And the EU is better positioned than most to put external pressure on the U.S. to get its act together.

News of the EU’s plan broke almost simultaneously with reports that, in the U.S., congressional Democrats had agreed to a $3.5 trillion budget reconciliation package that includes several climate-friendly line items. Those reportedly include a “polluter import fee” similar to the one floated in the EU this week, though it’s not yet clear how that would work or how the two would interact. Even that best-case scenario is peanuts. The Biden administration’s full American Jobs Plan included roughly $1 trillion of climate-related spending to be doled out over eight years—roughly 1 percent of gross domestic product annually. It isn’t yet clear whether the reconciliation proposal will reach even that, though rumors suggest it could. Many of those funds are likely to come in the form of tax credits that, without reforms, could funnel money to Wall Street tax equity investors and exclude public entities that provide millions of people with power. Although the jobs plan mercifully managed to include a clean electricity standard, it’s still quite possible that whatever version of that makes it through reconciliation could help greenlight new polluting gas infrastructure, only really helping to shut down already unprofitable coal plants in the coming years. It might also just incentivize coal plants to keep operating with boondoggle carbon scrubbers slapped on top.

Passing this $3.5 trillion reconciliation package will give the U.S. a loose plan for money to be spent on things that will help advance certain climate priorities. That’s very good news. But it will not create rules through which the Environmental Protection Agency can regulate carbon dioxide directly, even though the Supreme Court has already said the EPA can do this. It will not phase out coal, let alone phase out prolific oil exports abroad.

Even if we remove Congress from the equation, the White House has many tools at its disposal to stem the flow of funds to Wall Street or end drilling on federal lands, which account for a quarter of emissions here. Biden isn’t using them.

Most of the blame for this sorry state of things lies with a successful, decades-running, corporate-funded quest by the right to fortify minority rule and police the bounds of acceptable political discourse on economics and climate change. That a senator like Joe Manchin, from a state of two million people, gets to constrain the agenda of a president elected by 80 million isn’t a sign of a healthy democracy.

Yet the current Congress may be the best we get from a climate perspective for the foreseeable future. Voting rights restrictions are storming through statehouses with the Supreme Court’s blessing. Should Republicans retake the House in 2022, it’s unlikely that they’ll ratify the election of any Democratic president in 2024. The coming months may be the last, best chance the U.S. has to pass comprehensive climate legislation, and many Democrats are dragging their feet.

Outside intervention, at this point, seems more than justified. Why, after all, should the rest of the world have to suffer the consequences of Joe Manchin, Mitch McConnell, and the rest of our antebellum political system?

The U.S., with its huge military and dominant currency, is still the planet’s biggest superpower: There are massive disincentives for other nations to poke the bear, without the bear having to lift a paw. This kind of global influence also allows our diplomats to operate in a fantasy world, claiming U.S. leadership in areas where the U.S. is clearly failing. Not long after Biden was sworn in, climate envoy John Kerry set out on a world tour to lecture other countries for doing things that the U.S. does. Last month he chided Egyptian President Abdel Fattah el-Sisi (an unsympathetic character, to be sure) for pursuing oil and gas development. The Biden administration is currently on pace to approve the highest number of oil and gas drilling permits since George W. Bush, with crude oil exports having ballooned 750 percent since 2015.

The U.S. has no claim to climate leadership, however much Democratic Cabinet officials talk about rising temperatures as an existential threat. The drumbeat of heat waves and hurricanes has not changed Republican minds on climate policy, nor made transformative climate policy look any more possible. As my co-author Daniel Aldana Cohen has put it, “Weather can’t do the work of politics.”

Real penalties from abroad might be one of the few things that could force American politicians to realize that there are near-term consequences for continuing to torch the planet. While the impact of proposed EU carbon fees on the U.S. would be relatively modest, they could still send shockwaves and spark a dispute at the World Trade Organization.

Tariffs and punishing sanctions are some of America’s most reliable tools of economic warfare. If this country continues to be a rogue actor on climate, it could get a taste of its own medicine.