Eco-Tariffs

An Eco-tariff, also known as an environmental tariff, is an import or export tax placed on products being imported from, or also being sent to countries with substandard environmental pollution controls. They can be used as controls on global pollution and can also be considered as corrective measures against "environmental races to the bottom" and "eco-dumping".

The result of eco-tariffs is the increase in Environmentally Preferable Products (EPPs). EPPs are “products which cause significantly less environmental harm at some stage of their life cycle than alternative products that serve the same purpose."

There has been debate on the role that increased international trade has played in increasing pollution. While some{[who}} maintain that increases in pollution which result in both local environmental degradation and a global tragedy of the commons are intimately linked to increases in international trade, others have argued that as citizens become more affluent they'll also advocate for cleaner environments. According to a World Bank paper:

Proponents of environmental tariff implementation have highlighted that if implemented correctly, the tariff could serve to stop strategic behavior of foreign nations and return efficient economic policy in the foreign country. Additionally, environmental standards will be harmonized between the trading nations as a result of the environmental tariff.

One of the major issues that are raised when discussing environmental tariffs, is the issue of a reduction in trade. The argument raised is that tariffs reduce trade and may not actually be targeting the actual source of the pollution. They argue that pollution is not just as a result of imported goods but a large part of pollution suffered occurs within the borders of a country, therefore trade would merely harming trade without actually addressing the root cause effectively.

Although the United States has in the past been accused of dragging its feet on implementing tough new anti-pollution measures, it was the originator of a legislative proposal suggesting an environmental tariff be applied against exporting countries whose exports gained significant cost advantages due to less stringent environmental regulations. The proposed legislation was tabled as the International Pollution Deterrence Act of 1991 and was introduced in its Senate in April of that year.

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