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Fixing China's Greenhouse Gas Emissions For Them
mdsolar writes: 'Paul Krugman, who won a Nobel Prize for understanding world trade, has proposed carbon tariffs as a way to get China to cut greenhouse gas emissions. He wrote, "China is enormously dependent on access to advanced-country markets — a lot of the coal it burns can be attributed, directly or indirectly, to its export business — and it knows that it would put this access at risk if it refused to play any role in protecting the planet. More specifically, if and when wealthy countries take serious action to limit greenhouse gas emissions, they're very likely to start imposing "carbon tariffs" on goods imported from countries that aren't taking similar action. Such tariffs should be legal under existing trade rules — the World Trade Organization would probably declare that carbon limits are effectively a tax on consumers, which can be levied on imports as well as domestic production. Furthermore, trade rules give special consideration to environmental protection. So China would find itself with strong incentives to start limiting emissions." As I read it, Article XX of the General Agreement on Tariffs and Trade does indeed allow us to unilaterally impose tariffs on China.'
mdsolar continues, "I'd suggest that there should be a ramped approach. First, we should acknowledge that dangerous climate change has come early and we are already suffering damages. The growth in Federal crop and flood insurance payouts is owing to the effects of climate change. Instead of increasing premiums, we should use climate damage tariffs to cover this increase. That amounts to a pretty small tariff, but it firmly establishes the liability connection. Non-Annex I countries (as listed in the Kyoto Protocol) are becoming the main contributors to cumulative emissions just as climate change has turned dangerous, that makes their emissions the cause of dangerous climate change. An accident of timing? Yes. But deliberately increasing emissions, as China is doing, eliminates safe harbor as well.
This small tariff could be used as a stepping stone to larger tariffs imposed cooperatively with other Annex I countries if China does not turn around. The larger tariffs could be used to assist with adaptation costs in countries with low per capita emissions where vulnerability to dangerous climate change is high. Lack of a clear funding mechanism for this sort of thing has been a sticking point at climate negotiations. This would essentially get funds from those who are causing the damage."
This small tariff could be used as a stepping stone to larger tariffs imposed cooperatively with other Annex I countries if China does not turn around. The larger tariffs could be used to assist with adaptation costs in countries with low per capita emissions where vulnerability to dangerous climate change is high. Lack of a clear funding mechanism for this sort of thing has been a sticking point at climate negotiations. This would essentially get funds from those who are causing the damage."
That's a good idea. China needs an economic incentive to clean up their air pollution problem. They can certainly do it. It took less than 20 years after the US Clean Air Act to get air pollution under control.
How about we all stop buying cheap Chinese shit if we care so much?
The prize is in honor of Nobel since Nobel did not institute a prize in economics. It was awarded in 2008 for Integrating the previously disparate research fields into a new, international trade and economic geography. http://www.nobelprize.org/nobe...
I'd suggest that there should be a ramped approach. First, we should acknowledge that dangerous climate change has come early and we are already suffering damages. The growth in Federal crop and flood insurance payouts is owing to the effects of climate change. Instead of increasing premiums, we should use climate damage tariffs to cover this increase. That amounts to a pretty small tariff, but it firmly establishes the liability connection. Non-Annex I countries (as listed in the Kyoto Protocol) are becoming the main contributors to cumulative emissions just as climate change has turned dangerous, that makes their emissions the cause of dangerous climate change. An accident of timing? Yes. But deliberately increasing emissions, as China is doing, eliminates safe harbor as well.
This small tariff could be used as a stepping stone to larger tariffs imposed cooperatively with other Annex I countries if China does not turn around. The larger tariffs could be used to assist with adaptation costs in countries with low per capita emissions where vulnerability to dangerous climate change is high. Lack of a clear funding mechanism for this sort of thing has been a sticking point at climate negotiations. This would essentially get funds from those who are causing the damage."
Your reading of GATT is not applicable. China falls under MFN, and tarrifs based on carbon emissions generally fall under "special interest protectionist measures", which means that they are not applicable.
In reality, implementing this would either require revocation of MFN status for China by the U.S., or modification to GATT. Modification to GATT would require a unanimous vote in the WTO, of which China has been a member since 11 Dec 2001, which means that a modification to GATT is off the table.
I've suggested that the way to deal with this, and with most of the job threat from offshoring, in fact, was to hold countries supplying products to the same standards that a domestic producer of those products would be held. That would include environmental, labor, and similar standards. This wouldn't address the economic inequity of people being to live for a lot less in China as on the same wages of the U.S., or that products manufactured for markets other than the U.S. market would necessarily meet U.S. standards either. But it would be a step in that direction.
To deal with any of the other loopholes, such as the "final assembly" loophole, where tarrifs aren't charged if the final assembly occurred within a given economic block, rather than in a foreign economic block (also called the "last major transformation" clause), would require even more work. So companies like Apple could still perform final assembly of Apple products in the Czech Republic, which, as an EU member, means not paying VAT import taxes compared to if they were wholly manufactured in China. Just as companies like GM do in the U.S. with regard to primary engine components for automobiles manufactured in Brazil.
Practically speaking, there's no way to get rid of all the loopholes without a One World Government(tm), which most people are against (especially the existing governments of nations which would be superseded by such a thing).
We may be driven there eventually, but we know the real solution to the carbon problem is to move to other sources capable of handling ever increasing base loads - and yeah, that doesn't mean hydroelectric, which endangers fish populations, or unreliable wind, or solar based on the available of solar grade silicon, relative to demand, being rather low.
Correct. But industry in the US would pick up, leading to more domestic prosperity. Without the tariff, China gets to lower costs of production and compete unfairly, reducing US GDP. Note also that we are paying this in increased flood and crop insurance premiums. The latter directly cuts into the competitiveness of our agricultural exports. Better to pay with external tariffs than internal premiums.
No, it will make goods made in Korea, Japan, Thailand more competitive. ALSO, it will encourage Apple, IBM, Dell, HP etc etc to consider what is happening as it will increase to the cost of their goods, so they will be putting pressure on the Chinese government too.
On the other side, if nothing is done you will pay more for insurances, more for food and everything else in your life.
Climate change does not stop for people who don't believe in it, the insurance companies believe its going to impact them so they are already increasing insurances to cover the expected costs. This will be passed onto consumers wether they believe or not.
"China is enormously dependent on access to advanced-country markets". If Americans, for example, didn't have access to BUY goods from China, a lot of our inexpensive consumer goods would cost quite a bit more. Cables for electronics, lightbulbs, trash cans, trailer hitches, and a million other things would cost alot more to produce domestically. Therefore, cutting ourselves off from China would mean we could afford to buy less - we'd all become poorer, in terms of purchasing power. In that way, we're nearly as dependant on China as they are on us, are we not?
Krugan certainly knows more about global economics than I do, but he's not shy about the fact that his writings are as much about promoting a liberal agenda as they are about understanding how global markets actually work. His book and blog are both titled The Conscience of a Liberal. Perhaps this proposal is a bit of wishful thinking, of wanting to promote "green", setting aside the fact that we don't really have much leverage over China. Heck, we've been trying for decades to get them to have some respect for basic human rights and we haven't been able to coerce them to do anything on human rights that they didn't want to do. They've been quite bold with claiming territory and sending warships to places they ought not be, so they don't seem to think the western countries have any leverage to rebuke them.
I actually think that's a good thing.
The "disposable economy" will currently live in causes a lot of domestic waste, not to mention the havoc it wrecks on domestic employment.
Yes, we'll buy less widgets. But in return employment rates will rise, and we'll shift to higher-quality merchandise.
It's one thing to buy a poor-quality product when the competition is twice the price. It's another thing when the price difference is only 25%.
http://pubs.giss.nasa.gov/abs/... " It follows that we can state, with a high degree of confidence, that extreme anomalies such as those in Texas and Oklahoma in 2011 and Moscow in 2010 were a consequence of global warming because their likelihood in the absence of global warming was exceedingly small."
You could also see it this way:
You would be taxing away the competitive advantage that companies in a polluting country would have against companies in those who restricts its carbon emissions.
In the short term, it would promote domestic business. In the long term, the polluting country is supposed to lower its emissions and get back in the game, and then both foreign and domestic companies should be able to compete on the same terms - creating more competition and again lower prices.
"We mustn't be caught by surprise by our own advancing technology" -- Aldous Huxley
Owing to Article XX, retaliatory tariffs are not allowed.
To illustrate this:
CO2 per capita (2009) [metric tons]:
USA 17,2
China 5,3
https://en.wikipedia.org/wiki/List_of_countries_by_carbon_dioxide_emissions_per_capita
China produces more TW-h per year than any other country at this point in time. There is already a HUGE effort in China to improve on that further. This is a nonsensical piece, the US is still the world's leader in terms of human waste production and CO2 emissions *per person* - I'm not sure what the political/fearmongering purpose behind this is but I'm sure there is one.
Nobel did institute a prize for economics, and the other social studies. It is called "Nobel prize for literature".
Why should China, or any developing country, give up its own economic development when the currently developed and powerful countries didn't have to and because they lack the political will do their part? Developed countries should see this as an opportunity to make money from China by selling them back cleaner technology that the developed countries invent.
It's bollocks to say "well, we already have a developed economy and we're too scared to change anything, so we'll make you live by the sink or float rules that we impose on you because we can".
Those who do not learn from commit history are doomed to regress it.
Uh, you do understand we're talking about tariffs, not sanctions, right? Sanctions are generally restrictions on trade and/or financial transactions. I suspect Iraq is the example you're thinking of. Tariffs are simply are tax on export. or (more commonly) imports. I honestly don't know where sanctions stand constitutionally in the United States but any argument that tariffs are unconstitutional is utter crap. Pretty much the first piece of major legislation passed after the introduction of the constitution was the Tariffs Act.
LOL, "unfairly"? China's per capita emissions are lower than Europe and the US, what alternative reality do you Americans live in? You Americans are so out of touch reality we wonder what's going to happen to you guys when your own shit finally hits your own fan.
Forget about lower prices, once the dollar collapses and the US loses the ability to print money like psycho and make the rest of the world suffer for it, the price of oil will double overnight in the US, which instantly makes everything else more expensive.
No. If importers could pass on the cost of the tariffs with impunity, then they could have sold at higher prices already and pocketed the difference as profit. Since they do not do so now, there is a strong indication that their competitive position means they can't.
"I know I will be modded down for this": where's the option '-1, Asking for it'?
Exactly. For example, every time Krugman gets involved in a debate about the banking sector, it becomes clear why he got the award. The Honorary Nobel Prize he got was handed to him by the head honchos at the Swedish Central Bank, so it shouldn't come as a surprise when his views are heavily leaned towards a more finance sector friendly Keynesian way of thinking.
So trying to boost his credibility with this "Nobel Prize" will only work on people who don't know what kind of a rigged anti-prize it is.
Absolutely false. The Riksbank gets its authority from the Swedish Parliament.
As you can see in this photo, Krugman is being handed his Nobel by King Carl XVI Gustaf who is a strictly ceremonial head of state. The King may be a customer of the bank, but he isn't a honcho at the bank; Parliament controls it.
However, figurehead Carl XVI Gustaf has no say in who gets the Nobel Prize in Economic Sciences; that is decided by this group of professors. Not the Sveriges Riksbank at all. Yeah, I know, you've got a conspiracy theory to explain why all these professors are puppets of a bank. Bullshit.
I just don't get why people post lies on the internet that are so easily checked on the internet. Makes no sense dude; for a ten second chuckle, you've branded yourself a liar in the Slashdot community. Where's the win in that?
--- Often in error; never in doubt!
There are few problems for which the former enron adviser's solution is not more government or more taxes.
China did sign and ratify Kyoto. http://en.wikipedia.org/wiki/L... The US signed but did not ratify. During the negotiations, the Senate indicated it would not ratify unless China accepted some emissions guidelines. (Could have been an increase like Spain, we only wanted a commitment.) http://thomas.loc.gov/cgi-bin/...::
This sort of reminds me of a Monty Python sketch about who to tax:
"I think we should tax foreigners living abroad", and "I think we should tax people standing in puddles of water."
The point being, that everyone thinks that problems can be solved by taxing someone else.
Schroedinger's Brexit: The UK is both in and out of the EU at the same time!
The growth in Federal crop and flood insurance payouts is owing to...
The growth in Federal crop insurance payouts is primarily due to the fact that the 2008 Farm Bill introduced federal crop insurance (or at least as it is currently implemented) and that went into effect with the 2014 crop year. So, the rise in federal crop insurance payouts have NOTHING to do with global warming. Second the growth in federal flood insurance payouts is due to the increase in the value of developed properties in flood plains. Federal flood insurance was introduced in 1972. Since that time, largely as a result of federal flood insurance, there has been a steadily increasing trend toward placing expensive structures in the flood plains of the country. This results in the value of the properties being insured increasing, which leads to increased flood insurance payout. There are several other factors which contribute to those increased payouts. All of those factors make the impact of global warming on the amount of those payouts insignificant.
The truth is that all men having power ought to be mistrusted. James Madison
The point is to change relative prices, not make the poor worse off overall. It is true that carbon pricing would be regressive but the revenue can and should be used to alleviate that problem by transferring money to those who will be disproportionately affected by the tax/tariffs at the bottom of the income distribution. Another option is to use the revenue to lower other regressive taxes (e.g. the payroll tax), provide income tax reductions, or boost the EITC, which should again mitigate the problem. Even if the revenue is not sufficient to make the poorest families whole, we may decide that additional transfers from general funds are necessary, which can definitely be paid for given that the US is an outlier among OECD countries in terms of how low taxes are.
Looking at the problem from a global perspective, even if we were unable to offset the costs to the first-world poor, there is good evidence that the countries that will be hit the hardest by climate change are third-world countries with a heavy reliance on subsistence farming. And, within these countries, it is against the poorest people who will be hit the hardest. Which means that, from a utilitarian standpoint, it may still make sense to hurt relatively poor first-world people if it benefits those who are much poorer than them.
Let's get our own act together before we try forcing other to do the same.
That applies equally to carbon emissions and democratic elections. We produce about 3X as much CO2 per capita as China, but we're going to try to tell them how not to spoil the air we breathe? Our elections are a joke- held periodically to give the general populace the illusion of living in a democracy, yet we send advisers and observers to other countries to tell them how to do it right.
It's no wonder the rest of the world hates Americans.
That's a good idea. China needs an economic incentive to clean up their air pollution problem.
They've already got one. How expensive do you think it is going to be to treat the health problems of over a billion people caused by pollution? They also have a political motivation. The ruling party wants to stay in power and if the people get sufficiently pissed off about the pollution their continued rule might come into question.
I've been to China. They are WELL aware of the problem. The trick for them is dealing with it without causing massive economic damage in the process of dealing with it. China is trying to drag tens of millions of people out of poverty through economic growth. They have more poor people than the entire population of the US.
So ... Obama got it for understanding World Peace?
Just wanting to know...
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
RoHS stopped them putting hazardous substances in products just to keep costs down.
RoHS isn't really about economics related to production costs. It's primarily about keeping six known toxins out of products, specifically lead, mercury, cadmium, hexvalent chromium, PBB and PBDE. While there is a economic price tag attached, the economic cost of RoHS compliance is pretty minimal in practice. The majority of electronic components sold these days are RoHS compliant already. For most companies the primary cost is in using lead free solder and providing a certificate stating that the product is RoHS compliant.
You would be taxing away the competitive advantage that companies in a polluting country would have against companies in those who restricts its carbon emissions.
You are presuming that China would/could not tax US products equally in return. US companies want to do business in China. Ford and GM sell a lot of cars there for example. If the US (hypocritically) imposed a carbon tax on China then China would be virtually certain to impose on on US goods in return. Rather than cooperatively work together on the problem we would hurting both economies with a trade war that in the end would be very unlikely to solve the root problem.
In the short term, it would promote domestic business.
No it would not - at least not in the way you are thinking. It would make components in everything you buy more expensive. A lot of stuff is made in China and there is no alternative or domestic supply chain equivalent for much of it. Supply chains do not change overnight. It would take time (years) to shift substantial amounts of production elsewhere, even when such a thing is easily possible. Furthermore the main thing that people buy from China doesn't emit pollution. The #1 reason we make stuff in China right now is because of cheap labor.
Does China currently have any incentive to buy the cleaner technology?
Sure they do. Same incentives we have. Pollution has very big health care costs, food supply costs, and if it goes on long enough, climate change costs. There are quality of life incentives. There are political incentives too - if enough people get upset enough about the pollution it can become a threat to the ruling party. The Chinese are acutely aware of the problem. It's just harder to deal with than you seem to think.
In fact implementing this tariff could be the thing that convinces them to start buying the cleaner tech.
China has more poor people than the entire population of any country in the world, save India. They are perfectly well aware of the need for pollution control but they also have the problem of trying to raise tens of millions of people out of poverty through economic growth. There is no easy answer to this.
Furthermore the US and other western countries pollute plenty themselves and it would be HUGELY hypocritical to impose a carbon tax when we emit plenty of the stuff ourselves. To a non-trivial degree the reason our carbon emissions are as low as they are is due to us outsourcing our emissions (along with product production) to China and elsewhere.
Want to cut down carbon emissions? Promote the use of nuclear, wind, solar and hydro power. Coal is plentiful and cheap in China and the US and it will not stop being used until other energy sources are competitive, even taking into account the fact that coal is not being forced to pay for much of the pollution it causes.
I've been proposing this for ages - it's just VAT for carbon ("CAT"), or even pollution in general ("PAT"). People inside the "PAT" zone pay taxes based on the added embodied polluition at each step of the manufacturing process. Goods leaving the PAT zone get a PAT rebate. Goods entering the PAT zone get their estimated embodied pollution charged to them at the point of entry. As a consequences, countries can't cheat and get a competitive advantage by gutting their environmental regulations (including carbon) - the world competes on a level playing field.
Very well; let this abomination unto the Lord begin!
In other columns and particularly his blog, which usually has much more data (and visualizations of the data etc) http://krugman.blogs.nytimes.c... Krugman is well aware that the US must act before the rest just because we are one of the biggest offenders here with much more CO2 use per capita than others.
Probably because solutions that depend on the herd to implement never happen. Not arguing for or against, I am just saying that expecting everyone to do the right thing will not happen. The only way it does is to legislate it. People are generally selfish and will continue to choose the $1 widget over the $10 widget.
So there would soon be no more sweatshops for corporate America. Watch your economy crumble.
Krugman spouts nonsense at times, but this one is appalling. Pollution in China involves a lot of forces, including the `clean' countries, acting in their own interests and he can't possibly fail to understand that. Neither the Chinese government nor the US corporations would like such a change. The root of the problem is that some people like to earn money by messing up the world.
This proves he's just a propaganda mouthpiece, to help the US make a handsome profit from polluting activities around the world, while shedding every single bit of responsibility.
This should not be directed at China but all nations and states.
Basically, America can solve this since we are the world's largest importer. But it needs to be done right.
First, we can not go with estimates. They are mostly in non-western nations. So use oco2 to measure the co2 flow in and out of nations. This way nations are not held responsible for others pollution.
Second, it needs to be normalized. Doing it per person is a joke. Instead, u want the tax to be based on co2 / $ of GDP. IOW, you want nations to grow, but u want the to do it efficiently.
Third, it is then applied as a VAT upon a whole seller selling to the retailer. Full tax is charged, unless the item is submitted to web app in which parts are described and where from. If u make to good in a nation like Sweden or costa Rica where emissions are low, then no tax.
Fourth, all delivery systems like FedEx that imported have to collect the tax. They can add some amount more to cover their costs.
I prefer the "u" in honour as it seems to be missing these days.
Thanks for the laugh to brighten the day. We have forgotten how to make steel or any consumer goods whatsoever, but somehow I doubt we'll forget how to print money, or run out of ink or special paper.
Umm, you do realize that the constitution specifically provides for the government to levy tariffs in Article 1 Section 8, right? Tariffs were the main source of revenue for the federal government until the income tax was established.
It would appear that Krugman wants to do all he can to promote every possible cluster-fuck to deepen and worsen the current depression, including attacking world trade with his rehash of the Smoot-Hawley tariff.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
I don't understand Krugman (who I respect) saying... "United States accounts for only 17 percent of the world’s carbon dioxide emissions, while China accounts for 27 percent — and China’s share is rising fast." ...when per-capita we're emitting far more than them. Not even counting historical carbon, emitted so that we could build roads and infrastructure then even total carbon emissions still dwarf China.
If we're not AT LEAST recognizing that we emit WAY more GHG more per-capita TODAY, then this is... this is terrible coming from Krugman.
http://data.worldbank.org/indi...
Hey. People work real hard to earn these things. Just look at Obama. He ... uhm ...ooo... let me see ... nevermind.