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U.S. Treasury's Yellen says carbon pricing can work, with caveats

CommoditiesJul 13, 2021 07:40PM ET
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© Reuters. FILE PHOTO: U.S. Secretary of the Treasury Janet Yellen hosts a meeting with International Monetary Fund Managing Director Kristalina Georgieva at the Department of the Treasury in Washington, U.S., July 1, 2021. REUTERS/Evelyn Hockstein/File Photo

BRUSSELS (Reuters) -U.S. Treasury Secretary Janet Yellen acknowledged on Tuesday the use of carbon-pricing schemes such as a planned new European border levy but stressed such moves should take into account emission-cutting progress made in other ways.

Yellen was in Brussels a day before the European Union unveils a major package of measures to tackle climate change.

Among them, it will outline what a carbon border adjustment mechanism (CBAM), designed to cut emissions by creating financial incentives for greener production and by discouraging "carbon leakage," as the transfer of operations to countries with less onerous emission restrictions is known.

"A carbon tax or carbon pricing cap-and-trade is a very efficient way to go about addressing emissions reductions, but there's nothing that requires countries to proceed in that way," she told Reuters in an interview.

"And it's very important to think through if a country adopts a carbon border adjustment, how it should treat countries that have also achieved environmentally-friendly production techniques, but through different means," she added.

She agreed that countries seeking to cut their own emissions were entitled to address possible carbon leakage.

"I think that's an important principle, and it would apply to the United States when we get to that point, and certainly the European Union and other countries," she said.

Yellen, in separate remarks to reporters in Brussels, said a carbon border adjustment mechanism would ensure that efforts to reduce carbon emissions in some countries did not shift high-emission activities to other countries with lower standards.

But she said there was broad recognition that more work was needed on how to integrate these mechanisms globally.

"There is a clear rationale for wanting to have it," she said. "But we really have work to do to think about how these regimes should be interactive."

The EU package to be unveiled on Wednesday is part of its efforts to cut net greenhouse gas emissions by 55% by 2030 from 1990 levels.

The European Commission has said its plan will be compatible with World Trade Organization rules and fair, requiring importers of goods such as steel to buy emissions certificates at the same price as domestic producers. But it has raised concerns in numerous countries.

U.S. Treasury's Yellen says carbon pricing can work, with caveats
 

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Comments (7)
Fred Smith
Fred Smith Jul 13, 2021 11:53PM ET
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52% of CO2 attributed to 23 cities in china and 2 in India. Stop destroying western civilization!
Options Trader
Options Trader Jul 13, 2021 9:55PM ET
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Who do these senior citizens represent? Is it a requirement to have an AARP Card to work in the government?
Benjamin McIntire
Benjamin McIntire Jul 13, 2021 9:55PM ET
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step up and do it yourself then
Millennial Dip Buyer
Millennial Dip Buyer Jul 13, 2021 9:55PM ET
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Benjamin McIntire  Why is everything you post so banal?  It's as if you've never had an original thought of your own your entire life.  You defend a woman whose economic policy is leading to higher inequality that has been seen in decades - something your previous posts indicate you're staunchly against, and yet you give this random dude on investing . com flak for criticizing the fact that most politicians are elderly and out of touch.  Your solution? "Do it yourself".  You realize nobody gets into politics without significant connections, money, access to "old boys clubs", etc, right?.  You're not actually this daft, are you?
James Andrews
James Andrews Jul 13, 2021 9:55PM ET
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They just WON'T DIE!!!
Fred Smith
Fred Smith Jul 13, 2021 12:07PM ET
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Fix China and India - stop punishing and destroying Western world so worst countries benefit.
Benjamin McIntire
Benjamin McIntire Jul 13, 2021 12:07PM ET
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Western still pollutes much more per capita. Man up.
Millennial Dip Buyer
Millennial Dip Buyer Jul 13, 2021 12:07PM ET
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Benjamin McIntire  "per capita" isn't really meaningful - it's not the citizens doing it.  These taxes, tariffs, etc, always penalize the poor or middle class the worst while claiming to be redistributed as rebates throughout the year - rarely does it make up for things.  It's a bandaid solution that further impoverishes the low and middle class who rely on end-user products, are impacted more by commuting costs, etc.  And no, obviously 'take public transit' doesn't work - that was never an option in most of North America due to political collusion with auto manufacturers.
Tony Coll
Tony Coll Jul 13, 2021 9:31AM ET
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Why is everyone in our entire government 115 years old??
David Bowie
Defcon2 Jul 13, 2021 9:31AM ET
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Their age is not the problem
Kaveh Sun
Kaveh Sun Jul 13, 2021 9:25AM ET
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Mfg moves factories to third world countries to avoid carbon # , plus cheap labor even though sometimes they have to bride officials in those countries
CHADWICK RICHINGTON
CHADWICK RICHINGTON Jul 13, 2021 9:24AM ET
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Evil woman
Kelly Mayer
Kelly Mayer Jul 13, 2021 8:54AM ET
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carbon removing technology. This.
 
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