He warned that developing countries could in turn tax U.S. exports, which are probably some of the most carbon-intensive in the world.
"This is a dangerous thing, and I think people in Congress must understand this," said Pachauri, who spoke with the AP after he addressed the National Press Club. "Please don't use this weapon."
"I'm afraid that those that have been pushing these provisions probably don't realize that all of this can cause a major negative reaction," Pachauri added. "The United States has always stood for a free market system. ... Legislation to move away from that principle is clearly counterproductive."
Pachauri's comments come as the Senate begins work on the House version of the bill in the hopes of passing the measure before nations meet in December in Copenhagen to hammer out a new treaty.
President Barack Obama has said the legislation is necessary for the U.S. to take a leadership role in the negotiations. But days after the House vote, Obama expressed concern over the border tariff provision, saying protectionist signals were the wrong message to send during a recession that has caused a dip in global trade.
The provision was added at the eleventh hour to secure the votes of Rust Belt lawmakers concerned that steel, aluminum and other energy-intensive industries would be placed at a competitive disadvantage.
But abroad, it already appears to be hindering progress toward an international treaty.
Developing countries at a recent G-8 meeting in Italy rebuffed calls by the U.S. and other industrialized nations to accept binding limits on their growing greenhouse gas emissions. And Indian officials told Secretary of State Hillary Rodham Clinton this week that their country would not accept binding targets on emissions.
India's minister of environment and forests, Jairam Ramesh, cited the carbon tariffs under consideration in Congress among the mounting pressures on developing countries.
"There is simply no case for the pressure that we - who have among the lowest emissions per capita - face to actually reduce emissions," said Jairam Ramesh. "And as if this pressure was not enough, we also face the threat of carbon tariffs on our exports to countries such as yours."
China, which has surpassed the U.S. as the largest emitter of greenhouse gases, has also said it opposes tariffs. Chinese officials have called on countries importing its goods to be responsible for the emissions created in China during manufacturing.
Pachauri said Tuesday that while U.S. leadership was essential, "you can't lead by bullying. You can only lead by setting an example."
"If the U.S. starts moving in the right direction and makes certain commitments, it will act as a model for the rest of the world and it would make a major impact in terms of changing people's values and their own intentions," he said.
