John Kerry, now Joe Biden’s envoy on climate, warned the EU that a carbon border tax adjustment should be a “last resort”, at the end of a four-day trip that aimed to build a transatlantic climate alliance ahead of the UN climate talks in November.

The former secretary of state told the Financial Times he was “concerned” about Brussels’ forthcoming plans for a carbon border adjustment mechanism and urged the EU to wait until after the COP26 climate change conference in Glasgow to move forward.

“It [a carbon border tax] does have serious implications for economies, and for relationships, and trade,” he said. “I think it is something that’s more of a last resort, when you’ve exhausted the possibilities of getting emission reductions and joining in some kind of compact by which everybody is bearing the burden.”

Brussels has said the carbon border adjustment mechanism will be designed to “surgically” target imports from countries which have not signed up to climate neutrality by the middle of this century. It is expected to initially target imports such as steel and cement from neighbouring countries in eastern Europe, Turkey and north Africa.

The mechanism is the centrepiece of the EU’s green push, with a draft proposal expected in June.

Wild fires ablaze in the western US last year: John Kerry is working to put climate policy at the centre of the country’s diplomatic efforts © NOAA/GOES/AFP via Getty Images

While the EU has been urging the US to follow its lead in areas such as carbon pricing and the new green “taxonomy”, which creates green standards and definitions, Kerry suggested the US was more likely to forge its own path in these areas.

Kerry’s trip this week, which spanned London, Brussels and Paris, is one of the first international tours from a White House that has pledged to put climate policy at the centre of its diplomatic efforts.

The new Biden administration and the EU have been working to develop a shared strategy ahead of COP26, and are teaming up to ask China, the world’s largest emitter, to reduce emissions more quickly.

However some cracks have emerged in conversations around the taxonomy, which Brussels is working to finalise, and the EU carbon border adjustment mechanism.

French finance minister Bruno Le Maire told Kerry the US and EU should develop an “identical” taxonomy, which would ensure common green standards on both sides of the Atlantic. “It would be a shame if at the end of the day we had two sets of rules in Europe and the US,” Le Maire said at a press conference.

Kerry did not appear to accept the French suggestion.

“I suspect that [US Treasury] Secretary [Janet] Yellen and the new SEC chair Gary Gensler and others will have a lot to say about exactly where we’re heading with respect to financial disclosure, and the taxonomy, green bonds and other things,” he said.

“It’s going to be imperative for the United States to weigh in, either with its own taxonomy, which we need to do, or obviously work with other countries,” he said, adding that no final decision has been made.

“Obviously, the United States has strong feelings about not having excessive regulation,” he said, while discussing the taxonomy. “I think we will safeguard that.”

On the carbon border adjustment, Kerry urged the EU to avoid putting a new tariff in place before COP26 in November.

“[Let’s] leave open the possibility here that you make Glasgow the moment where we come together with an agreement as to what we’re all going to do and it isn’t necessary to have a border adjustment,” he said.

The Glasgow meeting will be a success, in Kerry’s view, if all countries adopted net zero emissions targets, which involves cutting emissions close to zero.

The US will host the world’s 20 largest emitters at a climate meeting in April, and is expected to announce its own new climate targets at the summit.

Additional reporting by Mehreen Khan in Brussels

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