European Climate Tariff Nixed—For Now

As I noted in my dispatches from the U.N.'s climate change conference in Nairobi last month, some European officials are contemplating the imposition of countervailing tariffs on countries they regard as global warming scofflaws. That would most definitely include the U.S. But perhaps cooler heads have prevailed. The Financial Times reports:

The European Union's trade commissioner will on Monday dismiss French proposals for a "green" tax on goods from countries that have not ratified the Kyoto treaty as not only a probable breach of trade rules but also "not good politics".

Peter Mandelson says that the levy, aiming to cancel the competitive advantage of countries that are not cutting carbon emissions to fight global warming, would be "highly problematic under World Trade Organisation rules and almost impossible to implement in practice".

The proposals are gathering support after Günter Verheugen, industry commissioner, backed the idea after it was separately proposed by an advisory group of EU government officials and industry leaders he co-chairs.

"Not participating in the Kyoto process is not illegal. Nor is it a subsidy under WTO rules," Mr Mandelson will warn in a podcast speech to 50,000 subscribers. "How would we choose what goods to target? China has ratified Kyoto but has no Kyoto targets because of its developing country status. The US has not ratified but states like California have ambitious climate change policies."

You can be sure that this is an idea that is not going away. Whole FT article here .