Slashdot Mirror
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."
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.
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
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.
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.
Not understanding global markets indeed.
Neither Krugman nor mdsolar seem to mention that China has the world's 2nd largest (by trading volume) carbon market.
And that's just their pilot program.
You'd think that since these two care so much about the issue, they'd follow the news:
China's Chongqing to launch carbon market trading on June 13
Thursday Jun 5, 2014
The southwestern city of Chongqing will be the seventh region in China to launch carbon trading when its market opens on June 13, the local carbon exchange said Thursday, in a move designed to curb the city's greenhouse gas emissions.
The market is the last of China's planned pilot CO2 markets ahead of the launch of a nationwide scheme later this decade as the world's biggest-emitting nation steps up efforts to slow down rapid emissions growth.
China is already moving in the right direction and a hard cap is definitely in their future....
If for no other reason than China is planning to increase its nuclear power production by more than an order of magnitude over the next 10~15 years.
If everything goes to plan, China will be producing more nuclear power than #1 and #2 (USA & France) combined.
Proposing a carbon tariff seems like a big middle finger to a government that is pouring tens of billions into solar, wind, and nuclear power.
(Did I mention that China is #1 in wind power?)
[Fuck Beta]
o0t!
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.
The EU has been doing this for a long time. RoHS stopped them putting hazardous substances in products just to keep costs down. We already have a scheme for carbon trading that takes into account companies that do their manufacturing in China, although it could go a lot further.
Nice to see the US finally waking up to this.
const int one = 65536; (Silvermoon, Texture.cs)
SJW, n: "Someone I don't like, and by the way I'm a fuckwit" - AC
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!
The USA only want to put an carbon tax/tariff on foreign products.
They will look pretty dumb when the 'foreigners' put the same tariffs on US products.
AFAIK the USA are just a very small bit behind China in CO2 output. That means per inhabitant and also per 'product produced' the USA produce far far far more CO2 than China.
When we have world wide CO2 based tariffs, the USA will be the first country going 'bankrupt'.
Cost free eBook I read (by iBook/Kobo/Amazon/ObookO/Gutenberg etc.): "The Green Odyssey" by Philip Jose Farmer.
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.