Peterson Institute for International Economics | Thu, May 20, 2021
by Jeffrey J. Schott
Responding to President Joseph R. Biden Jr.’s charge to Cabinet members to contribute to the effort to decarbonize the US economy, US Trade Representative Katherine Tai has put forward useful proposals on how trade policy can support solutions to global warming. While trade measures can complement essential domestic carbon mitigation efforts, they also can inhibit progress, if new restrictions are applied against green subsidies or in response to carbon border adjustment measures (CBAMs) coming soon from Europe and possibly others. Ambassador Tai will have to work closely with climate diplomats to ensure that the enforcement of US trade laws does not undercut international climate goals.
That US policy on climate change is no longer in denial is obviously welcome. At the Global Climate Summit in April 2021, the United States committed to reduce greenhouse gas (GHG) emissions by 50 to 52 percent from 2005 levels by 2030 and to achieve net zero emissions by 2050.
To mitigate GHGs, Ambassador Tai argued that the United States needs to develop “innovative environmental technologies, goods, and services” in areas such as clean energy and low-emission vehicles. She already has contributed in that regard by helping to broker the settlement of the intellectual property dispute on electric batteries between the South Korean companies SK Innovation and LG Chem that will allow the growth of US-based production by both companies.