Watson Institute for International and Public Affairs
Facebook Twitter YouTube Trending Globally Podcast Instagram LinkedIn Tumblr Email list

Climate and Energy in the Transatlantic Relationship

June 21, 2021

Jeff Colgan recently published, "Climate and Energy in the Transatlantic Relationship" - a piece examining the relationship between climate change and changes in the transatlantic political landscape. 

Climate change is not only the world’s single biggest global challenge, but also the biggest opportunity for the transatlantic political relationship. While various energy issues, including the Nordstream 2 pipeline, offer other opportunities for cooperation, none of them is nearly as important as climate change. Perhaps the most intriguing opportunity is integrating new unilateral climate proposals into an existing multilateral trade system. Doing so would help both parties in the context of increasing U.S.-E.U.-China geopolitical rivalry. 

Policymakers on both sides of the Atlantic are coming to see climate change as a competitive opportunity rather than a collective burden. While green industrial policy as a competitive opportunity is mostly good news, where it gets interesting is the intersection with international trade rules. Pro-climate policies like tougher regulation or a carbon tax can impose higher costs on domestic producers of carbon-intensive products like steel, glass, aluminum, and concrete. Both the European Union president Ursula von der Leyen and U.S. president Joe Biden have promised to use some version of border adjustment tariffs (BATs, also known as carbon tariffs or border adjustment measures) to shield their economies from the competitive disadvantages of pro-climate policies.