How an EU tax could slash climate emissions far beyond Europe

The big reveal: Last week, EU leaders approved the most aggressive climate-change plan in history. The text of the $2 trillion budget agreement called for introducing a “carbon border adjustment mechanism” by 2023. That’s EU-speak for a tax on imported goods produced in ways that emit more greenhouse-gas emissions than are allowed by EU manufacturers.

Makes sense: Without a carbon border tax, the EU could claim emissions reductions even as production of its goods simply shifts to other parts of the world, where they can be produced in cheaper and dirtier ways. 

Bigger than Paris: In addition, it might lead to bilateral or trilateral trade deals that could achieve greater climate progress than international treaties like the Paris agreement, where any targets must be loose enough to get nearly 200 nations onboard.

Details, details: The detailed negotiations won’t begin until next year, and will require several layers of approvals. And the effort is sure to face a series of legal challenges, particularly from poorer nations. Read the full story.

—James Temple