1---ALL TAXES---ANY carbon tax or BCA triggers the link.

Any U.S. carbon tax will face another challenge: international trade. Imported goods from nations with a lower carbon tax, or no carbon tax, would have an advantage over domestic goods, undermining the effectiveness of the carbon tax. To prevent this, a carbon tax policy might include border adjustments, which are taxes on imports used to ensure that all goods in the United States, whether made at home or abroad, are taxed in a similar way. Without these adjustments, domestic producers would be unable to compete with foreign, non-taxed goods. Under current international law, however, border adjustments are illegal.

A nationwide carbon tax that included border adjustments on foreign imports would raise several issues. The World Trade Organization would likely consider the tax to be a direct violation of international trade agreements. International bodies might force the United States to roll back the carbon tax on all imported goods. And other nations would likely take actions of their own, levying retaliatory fees on American exports. The impact on U.S. competitiveness could be dramatic. A trade war could ensue and gravely damage the global economy, like the trade war a century ago that contributed to the Great Depression.

Political challenges aside, carbon taxes do not assure the attainment of climate-related goals. Carbon taxes can be calibrated to affect the price of dirty fuels in predictable ways, but they cannot assure specific levels of emissions reductions. That is because taxes influence choices in the marketplace in unpredictable ways. Policymakers cannot know in advance how consumers and businesses will react to any price increase caused by imposing carbon taxes.

What is more, carbon taxes do only part of the job. Carbon taxes target fossil fuels according to how much carbon dioxide is emitted when the fuel is burned. But emissions dangerous to the environment do not come from carbon alone. Other gases such as methane, nitrous oxide, and hydrofluorocarbons can be exponentially more harmful than fossil fuels. Carbon dioxide accounted for 82 percent of U.S. emissions in 2013, but according to the Environmental Protection Agency, the other harmful gases are 25 to 14,800 times more powerful drivers of global warming than carbon dioxide. Clearly those gases will also need to be managed if climate change policy is to be successful.