The European Union’s sweeping new plan to tackle climate change includes a proposal that if adopted would be the first of its kind: A carbon tariff on imports from countries that aren’t taking similarly aggressive steps to slash their own planet-warming greenhouse gas emissions. Carbon border taxes, which have been debated for years , are intended to solve a basic problem. If a single country tries to impose policies to cut emissions domestically, it runs the risk that, for instance, its steel and cement factories will face higher costs and be at a disadvantage to foreign competitors with looser environmental rules. If steel and cement production shifts overseas as a result, that would undercut the climate policy, since those foreign factories would be emitting just as much or more carbon dioxide elsewhere. In theory, a carbon border tax could help prevent that undercutting. If factories all over the world […]