Full Title: Industrial Decarbonization and Competitiveness: A Domestic Benchmark Intensity Approach
Author(s): Raymond J. Kopp, William Pizer, and Kevin Rennert
Publisher(s): Resources for the Future
Publication Date: May 12, 2022
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This issue brief suggests an approach to decarbonizing the industrial sector that involves a performance metric, providing equal treatment for foreign and domestically produced industrial goods while addressing competitiveness concerns.
It outlines an industrial decarbonization policy that natively and explicitly addresses competitiveness concerns. This policy would define a performance metric for a selected set of industrial sectors and apply a fee based on the greenhouse gas (GHG) content of produced goods in those sectors, but only to the extent the goods’ GHG content exceeds the metric. The fee would be applied equally to both foreign and domestically produced goods, maintaining a level playing field. Overall, this policy approach inherently addresses competitiveness concerns and creates incentives to reduce emissions down to the performance metric, while offering additional advantages.