1. It is often stated that it is illegal under US law for Congress to allow an international body to impose a tax on US-registered companies. Is there in fact any legal basis for this statement, and if so, what is it?
2. If there is such a prohibition, would it apply to a cap and trade scheme under which US-registered companies were required to purchase allowances to cover their emissions? Is such an arrangement within the legal definition of a tax, for the purposes of any prohibition on international tax which may exist?
3. Are we correct to assume that any legal obstacles would not apply in the case that the US itself were to collect revenues from a maritime levy, or conduct an auction of permits as part of a global cap-and-trade scheme?
As an initial matter, when thinking about US law and its applicability to any global climate change initiative, it is almost always true that the US will not enforce any requirement regulating any of its citizens (individual or corporate) that is not enacted by Congress. Notwithstanding any constitutional requirements, it would be politically disastrous for the US to hand over regulatory authority to an international body. Currently, members of Congress have expressed outrage over the idea of the U.S. Environmental Protection Agency regulating greenhouse gas emissions without Congress’s explicit approval, so there is no question that Congress would immediately move to block any attempt by an international body to regulate US companies without Congress’s approval.
Speaking to the constitutional question, Article I, Section 8, of the US Constitution states that Congress shall have the power “to regulate Commerce with foreign Nations…” and “to lay and collect taxes, duties, imposts and excises…” Article I, Section 7 states that “all bills for raising revenue shall originate in the House of Representatives.” Courts in the United States have consistently held that the legislative powers of Congress cannot be delegated. See United States v. Shreveport Grain & Elevator Co., 287 U.S. 77, 85 (1932). See also Field v. Clark, 143 U.S. 649, 692 (1892); Wayman v. Southard, 23 U.S. (10 Wheat.) 1, 42 (1825). We do not know the rationale used by those who assert that it is illegal to allow an international body to impose a tax on US-registered companies, but it would seem that the prohibition on the delegation of legislative power to regulate commerce with foreign nations or to lay and collect taxes would be their strongest argument. The argument would be that by allowing an international body to impose a tax on US companies, Congress would have unconstitutionally delegated legislative authority that was expressly granted to Congress under the Constitution.
The commercial bar to an international body imposing a tax on US-registered companies likely would also apply to a cap and trade scheme under which US-registered companies were required to purchase allowances to cover their emissions so long as the United States did not ratify a treaty providing for such a scheme. Cap-and-trade programs arguably impose taxes and unquestionably regulate international commerce. It is therefore highly unlikely that an international body could enforce the requirements of a cap and trade regime against a US company in US courts if the US Congress did not enact such a cap and trade regime or ratify a treaty providing for such.
As suggested, any legal obstacles likely would not apply in the case that the US itself were to collect revenues from a maritime levy, or conduct an auction of permits as part of a global cap-and-trade scheme. Such a scheme would require the US Congress to pass some enabling legislation, which would satisfy the constitutional requirements. Note that a treaty could not self execute on this point. The US Congress would need to pass a law for such a program to be binding upon US companies.