EU's dangerous decision on climate change that may lead to a trade war
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24/03/2008
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Financial Times
Sir, A profoundly ill-conceived decision by the European Union leaders on March 14 could pave the way for a global trade war over climate policy. The decision opens up the possibility for the EU to impose trade barriers on countries with a less ambitious climate agenda than the EU. The risk of "carbon leakage' can be allowed to trigger compensatory tariffs on products imported from countries outside of the EU's emission trading system. Sadly, the decision satisfies a cynical alliance of environmentalists and Europe's energy intensive industry. First, EU-initiated trade barriers could provoke a global trade war between the EU on the one hand and countries such as the US, China, India and Brazil on the other. European climate tariffs would in turn lead to raised tariffs on EU products exported to these countries. China, for instance, could insist on tariffs that reflect western Europe's three times higher emissions per capita