PARIS—Europe is preparing legislation that would jolt the rules of international trade by taxing imported goods based on the greenhouse gases emitted to make them, a plan that has sent shudders through the world’s supply chains and unsettled big trading partners such as the U.S., Russia and China.
The European Union plan, due to be announced next month, is generating debate ahead of a summit of the leaders of the Group of Seven rich countries in southwestern England starting Friday, where the international response to climate change is set to be a central topic.
The EU proposal would open up a new front in the fight against climate change by setting the world’s first limits on carbon in traded goods. The 27-nation bloc says it wants to stop polluting industries from shifting production outside Europe to avoid the bloc’s emissions limits and then exporting back into the EU. The proposal would also use the EU’s economic heft to send a powerful signal for other countries to start regulating carbon emissions.
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