Talking About International Trade at COP28 with Senator Sheldon Whitehouse

Sheldon Whitehouse, Kristin Hayes, Matt Fleck, and Elizabeth Wason

At this year’s Conference of the Parties in Dubai, US Senator Sheldon Whitehouse discussed the new Clean Competition Act that he introduced in Congress, alongside the international context and potential implications.

Last week, US Senator Sheldon Whitehouse (D-RI) and Congresswoman Suzan DelBene (D-WA) reintroduced the Clean Competition Act for consideration in Congress. The bill includes a so-called “border adjustment mechanism,” a policy that imposes a fee on imported goods based on the amount of greenhouse gas emissions emitted during the production of those goods. In November, Senator Bill Cassidy (R-LA) introduced the Foreign Pollution Fee Act, which also includes a border adjustment mechanism. And in October, the European Union implemented the first phase of the bloc’s own related policy, which they call the EU Carbon Border Adjustment Mechanism (CBAM). In short, interest in policies that consider climate and trade together is increasing, and so is research into how these policies work.

Senator Whitehouse, who introduced the Clean Competition Act while attending the 28th Conference of the Parties (COP28) in Dubai, met up with Resources for the Future (RFF) Senior Director for Research and Policy Engagement Kristin Hayes at the conference to discuss the new bill and recent interest in policies that blend climate and trade. “The goals of the Clean Competition Act are to protect US clean manufacturers from unfair competition from polluting sources overseas,” said Senator Whitehouse as part of his discussion with Hayes in the audio clips below. “[The bill] creates a disincentive for the polluters. It also creates a huge market push into clean energy, because now there’s real economic reward for being a less carbon-intensive producer.”

The approach taken in the Clean Competition Act differs in some key respects from Senator Cassidy’s Foreign Pollution Fee Act, but the fact that bills have been introduced by both Republicans and Democrats demonstrates a bipartisan interest in these types of policy measures. With both of these bills now introduced, Whitehouse discussed how he sees the next steps unfolding and whether a bipartisan compromise could blend elements of the two bills. Hear more in the audio clip below.

The conference delivered several optimistic highlights: COP28 began with a breakthrough deal on a fund to help developing nations adapt to the effects of climate change, known as “loss and damage.” The first week also saw the announcement of new efforts from the public and private sectors to reduce methane emissions, including a new rule from the Biden administration. Another hot topic was international trade, which was the focus of an entire day at the conference. The CBAM, which imposes fees on products that are imported to the European Union from countries that do not have comparable carbon prices, received a great deal of attention at the COP.

Whitehouse and Hayes discussed this emphasis on trade, Whitehouse’s thoughts on the CBAM, and how decisions at the conference may affect US policymaking efforts. Hayes asked Whitehouse how the elements of the Clean Competition Act compare with the CBAM in the European Union. Are they similar in their approach, or do they show fundamental differences—and how does Whitehouse expect the two measures to interact with each other?

“Where trade comes in is it provides, I think, an opportunity to solve the problem—cure the failure—of no economic signal related to climate and just a lot of exhortation and good intentions,” said Senator Whitehouse. “Without a proper economic signal, it’s very hard to expect people to swim upstream against their economic interests.”

Last year’s conference ran into overtime, and negotiations at this year’s COP are no different. “Year after year, carbon emissions increase, carbon concentration in the atmosphere increases, methane emissions increase, and methane concentration in the atmosphere increases—so, it’s hard to say that COPs have been much of a success,” said Senator Whitehouse. “The bottom line behind all of this is that we are failing in addressing the climate problem on planet Earth, and these types of [carbon border adjustment] measures at long last actually put some price on carbon pollution.”

Expect additional research from Resources for the Future that delves into these issues on the table, including international trade and US climate action.

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