As US renews climate relations with EU and China, carbon pricing raises tensions

(Climate Home News, 25 Jan 2021) How to price carbon across borders is set to become a defining issue of the three-way relationship between the US, China and the EU.

As president Joe Biden reengages the US in international climate cooperation, the dynamic between the world’s three largest emitters will largely set the pace for decarbonising the global economy.

The EU and China have both committed to cut their emissions to net zero and Biden aspires to do the same, but they all start from different places. That raises tensions when it comes to trade in carbon-intensive products like steel, cement and chemicals.

The issue will be an “unavoidable topic” in Brussels’ relations with the US and China, Jennifer Tollmann, policy advisor at think-tank E3G told Climate Home News. “It can either be the biggest point of cooperation or risk becoming one of the biggest points of contention,” she said.

The misalignment of the EU, US and Chinese positions on the issue of carbon pricing “has the potential of flaring up relatively early this year,” warned Connie Hedegaard, of the KR Foundation and former EU commissioner for climate action. That “could end up being a bit dangerous and sour the atmosphere,” she said.

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Climate Home News, 25 Jan 2021: As US renews climate relations with EU and China, carbon pricing raises tensions