Definition of Environmental Tariff

What does the term "environmental tariff" mean? What is the definition of the term "environmental tariff"?

Let's first look at the definition of the term "tariff".

A "tariff" is defined as a "tax on imports or exports".

An "environmental tariff", on the other hand, is a tax (either on imports or exports) that is implemented against countries who are seen as having "substandard environment controls".

Developing nations may not have the funds or desire to implement environmental controls (which are costly) on the production of the various goods that they may manufacture. Environmental tariffs are seen as a way of levelling the playing field and making sure that countries don't "cut corners" when it comes to their environmental controls, in order to avoid a "race to the bottom". If environmental tariffs weren't used, it is thought, some nations would completely forego environmental controls in order to increase their exports.

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