Joe Biden’s presidency of the United States is an opportunity to realize a long-discussed approach to global warming: a climate club. The United States, the European Union and China together emit half of the world’s greenhouse gases. They must come together to cut domestic emissions and levy a carbon tax on imports. That would incentivize all nations to cut their emissions.
Nobel-prizewinning economist William Nordhaus proposed the climate-club idea in 2015. He suggested that a group of countries should agree to manage emissions to a strict level and coordinate tariffs on imports from others. Nations would want to join the club to avoid trade penalties.
And there is a way to do it. World Trade Organization (WTO) rules allow ‘carbon border adjustment’ charges — taxes on carbon emissions that are released during the manufacture of imported goods