Green Steel Agreement: Climate mitigation and international trade come together in decarbonisation policy proposal | Vanderbilt News

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In one paper published by the Roosevelt Institute, the Vanderbilt faculty proposed that as the G7 2021 summit begins, the Biden Administration has a chance for a fresh start in tackling climate change.

Director of International Legal Studies at Vanderbilt School of Law Timothy Meyer and Director of Governance Studies from the Roosevelt Institute Todd Tucker recommended a two-way climate change / international trade policy they call the Green Steel Agreement. Its purpose is to work within the legal and political constraints faced by nations in the country, rather than drafting international trade restrictions.

The agreement, the authors said, calls on like-minded countries to set up an international steel-focused climate club, where the condition of membership is to transform, as soon as possible, all domestic production of steel in green methods. The club would agree to apply a common carbon tariff on steel imports from non-member countries and within 10 years, all members would replace the tariff with an internal ban on the sale of stainless steel. Member states will also pledge to reinvest toll revenues in green steel projects and development.

The Green Steel Agreement takes decarbonisation from a market-focused approach that has not worked to significantly reduce emissions and emphasizes the central role of the state in securing global public goods, Tucker and Meyer write.

Steel is the best place to start, they say, because the industry is likely to support something like a Green Steel deal. For example, the American Institute of Iron and Steel has said that a strong and effective carbon frontier measure is essential to maximize the role of the steel industry in reducing global greenhouse gas emissions.

The Green Steel Agreement takes decarbonisation from a market-focused approach that has not worked to significantly reduce emissions and emphasizes the central role of the state in securing global public goods. – Tim Meyer, Professor of Law

Starting with an industry sector like steel that is prepared to move to carbon frontier measures, governments can demonstrate the feasibility and proof of concept early as they invest in research and development to innovate and reduce the cost of green technologies.

The steel industry is the ideal sector in which transatlantic cooperation on trade and climate begins, Tucker and Meyer write. It is one of the largest carbon emitters in the manufacturing sector; is on track to consume 50 percent of the available carbon budgets by 2050, is heavily traded, and is already subject to the extensive policy controls that the US and EU are negotiating.

The climate crisis is one of the most important long-term challenges facing policymakers around the world. The recent Scripps Institute of Oceanography and the National Oceanic and Atmospheric Administration released data showing that the amount of carbon dioxide in the Earth’s atmosphere reached the highest levels in human history and carbon dioxide is the most important greenhouse gas that promotes global warming.

Integrating climate mitigation strategies into trade policy is important because over a quarter of carbon emissions (27 percent) are embedded in trade flows, according to the authors. While U.S. production and exports are relatively carbon efficient, the U.S. still consumes carbon-intensive products imported from countries like China. This only shifts the place where the pollution is happening, rather than reducing it in general.

The Green Steel Agreement becomes an opportunity for countries to consider what is locally effective in mitigating the climate, and then translate those lessons into trade rules through negotiated results. Conceiving a way for the manufacturing industry to support climate initiatives that ultimately serve, the Green Steel Agreement changes climate policy and makes future climate support action more likely.