Tariff initiated trade wars can have unintended consequences. Here are six possible positive outcomes at the disposal of policy makers.
Tariffs are the blunt instruments of trade wars. Once ignited, trade wars can have unintended consequences.
What if we reimagined tariffs as precision tools to protect and the Earth instead of just national industries?
This post explores how tariffs — when applied with environmental purpose — can reduce pollution, lower global carbon emissions, and foster a global shift toward circular, regenerative economies. These six strategies can align with living within planetary limits.
1. Carbon Border Adjustment Mechanisms (CBAM)
What: Tariffs based on the carbon intensity of imported goods.
Where: European Union
Planetary Impact: Pushes foreign producers to decarbonize, levels the playing field for clean domestic producers. Encourages localized, low-carbon economies and reduces global over production.
2. Pollution-Based Import Tariffs
What: Tariffs applied to goods produced with high levels of air, water, or soil pollution.
Where: India (proposed green tariffs)
Planetary Impact: Global manufacturers are incentivized to adopt cleaner technologies. Shifts demand away from unsustainable production systems.
3. Circular Economy Tariff Adjustments
What: Lower tariffs on recycled/reused goods, higher on virgin material goods.
Where: European Union
Planetary Impact: Stimulates global circular economy markets and reduces waste. Encourages sufficiency and reuse over extractive growth.
4. Tariffs on Fossil Fuel-Subsidized Exports
What: Tariffs applied to goods made using subsidized fossil fuels.
Where: US–EU proposed Green Steel Club (defunct sadly)
Planetary Impact: Discourages fossil dependence, rewards clean energy industries. Prices in real ecological costs and reducing hidden subsidies.
5. Plastic and Toxic Product Tariffs
What: Tariffs or bans on imports using virgin plastic or harmful additives.
Where: Kenya (plastic bag import restrictions)
Planetary Impact: Reduces plastic pollution and encourages biodegradable innovation. Minimizes excess consumption.
6. Local Green Industry Protection
What: Tariffs to support domestic clean tech sectors.
Where: United States (Inflation Reduction Act Also Defunct sadly)
Planetary Impact: Builds local green economies and reduces emissions from global shipping. Supports re-localization and low-energy production.
Case Study: Extended Producer Responsibility Model - Taiwan's 4-in-1 Recycling Program
Taiwan’s world-leading 4-in-1 EPR scheme combines:
1. Community participation
2. Local cleaning teams
3. Recycling enterprises
4. A national recycling fund financed by manufacturers/importers
Impact: Household waste dropped from 1.14 kg to 0.4 kg per person per day. Recyclers subsidized, not penalized. Community involvement and producer responsibility align for long-term sustainability. This is a blueprint for reduced material throughput, increased social cohesion, and corporate accountability.
Conclusion:
Reframing tariffs as sustainability tools could shift global trade from competition to cooperation — from economic nationalism to planetary stewardship. And in doing so, these policy levers may become vital pathways toward a livable future.
The current change in sentiment is a chance to recognize that the system is broken. The current crisis presents opportunities to rebuild our economic model.
Policy makers can use these 6 strategies to avoid obsolescence.
References
Nine Planetary Boundaries (BIRI 9) https://www.stockholmresilience.org/research/planetary-boundaries.html
EU Carbon Border Adjustment Mechanism (CBAM) (BIRI 8) https://taxation-customs.ec.europa.eu/carbon-border-adjustment-mechanism_en
India Green Tariffs Proposal (BIRI 6) https://sprf.in/india-vs-eus-cbam-trade-wars-green-tariffs/
EU Circular Economy Incentives (BIRI 6) https://publyon.com/eu-circular-economy-act-how-will-it-shape-the-future-of-the-eu-and-your-business/?switch_language=en
US-EU Green Steel Club (Proposed) (BIRI 7) https://www.nature.com/articles/s44168-024-00119-z
Kenya Plastic Ban (BIRI 7) https://www.nema.go.ke/index.php?option=com_content&view=article&id=102&Itemid=121
Taiwan 4-in-1 Recycling Program (BIRI 7) https://rapidtransition.org/stories/taiwans-transition-from-garbage-island-to-recycling-leader/?utm_source=chatgpt.com
South Korea VBWF + EPR (BIRI 8) http://www.kora.or.kr/eng/coreBusiness/eprPolicies.do#:~:text=Definition%20of%20EPR%20system&text=The%20KORA%20manages%20the%20fees,circulation%20society%20and%20sustainable%20development.
Japan Eco Towns + Appliance Recycling Law (BIRI 8) https://www.env.go.jp/en/recycle/asian_net/Country_Information/Law_N_Regulation/Japan/Law_for_the_Promotion_of_Recycling_of_Small_Home_Appliances_English.pdf
Germany Green Dot System (BIRI 8) https://www.gruener-punkt.de/en/
Rwanda Community E-Waste Program (BIRI 8) https://www.minict.gov.rw/news-detail/rwanda-launches-campaign-to-boost-e-waste-collection-and-recycling
Sweden Producer Responsibility System (BIRI 9) https://www.eea.europa.eu/en/analysis/publications/92-9167-052-9-sum/page005.html
