> Applying an equivalent tax on imports from countries that don't impose a similar tax, called a Border Carbon Adjustment, to prevent domestic manufacturing from being disadvantaged ... to encourage companies to audit their supply chain
Not that I'm opposed to the cause or aligning incentives in general, but practically, this just seems flat out impossible to implement in any way that has teeth.
Do we punish poor countries to not destroy our local business, or do we let them pollute to not further impoverish them (in which case they will just start doing carbon tax arbitrage)? Both solutions suck, but with different US demographics which makes the local politics tricky even when everyone agrees on terminal values.
Of course, the real elephant in the room is China! China will never let auditors hurt a local business besides occasionally destroying a Jack Ma. The company doing the manufacturing has an enormous incentive to lie since they get to pocket the difference (minus payoffs), the auditor has an incentive to lie as otherwise they would be fired/imprisoned/social-decredited, and the government has and will continue to lie/cheat/steal to protect domestic business. When we inevitably have incontrovertible, unignorable proof they are lying and lied for the last N years, do we start a trade war after local manufacturing has been destroyed and we are fully reliant on their goods? Do we just start a trade war up front to price in the lying from the get go which looks indistinguishable from massive tariffs... in any case, China won't retaliate for what reason?
> ...the maximally pessimistic value can be applied
Consider how truly feckless the US/WHO has been in addressing China on the now probably probable lab leak! There have been no consequences for refusing to cooperate in the investigation of the origins of a disease that has done trillions of dollars in damages and killed 5 million people (China threatened to withhold medical supplies at the start of the pandemic, so it goes, and its probably not within the interests of our own elites, either). Even if you think China has the same goal of reducing climate change, they will still keep two sets of books (or more!).
Anyway, this is a sort of visibility/legibility problem into other countries that feels really hard to solve politically. Every local actor is strongly incentivized to defect which makes the system untenable locally. It reminds me of tax collectors in medieval Europe, except, you know, it would be for the whole world.