Fighting Climate Change With Trade

mdsolar writes with this story about the possible elimination of tariffs on environmental goods between the world's largest economic powers. The United States, the European Union, China and 11 other governments began trade negotiations this week to eliminate tariffs on solar panels, wind turbines, water-treatment equipment and other environmental goods. If they are able to reach an agreement, it could reduce the cost of equipment needed to address climate change and help increase American exports. Global trade in environmental goods is estimated at $1 trillion a year and has been growing fast. (The United States exported about $106 billion worth of such goods last year.) But some countries have imposed import duties as high as 35 percent on such goods. That raises the already high cost of some of this equipment to utilities, manufacturers and, ultimately, consumers. Taken together, the countries represented in these talks (the 28 members of the E.U. negotiate jointly, while China and Hong Kong are represented by separate delegations) account for about 86 percent of trade in these products, which makes the potential benefit from an agreement substantial. Other big countries that are not taking part in these talks, like India, South Africa and Brazil, could choose to join later.

Comments

Does anyone oppose this?

[phantomfive]

Eliminating market inefficiencies in a way that benefits the environment seems like something everyone could find a reason to support.

Re:Does anyone oppose this?

[ShanghaiBill]

This is social engineering by subsidizing one group of products and letting other products pay the price.

No it isn't. Protective tariffs are another form of subsidy, and reducing them is a good thing. Plenty of (mostly dumb) subsidies will remain, but this is a step in the right direction.

Re:Does anyone oppose this?

[drinkypoo]

Since when have protective tariffs been "efficient"?

If we required accounting of emissions, and not simply of currency units, then there would be no need for tariffs to address the issue of the hidden environmental costs. They can eventually be translated into economic costs, but they also affect quality of life — you can assign economic costs to that as well, but you'll hardly tell the whole story.

When you buy goods made somewhere with inadequate pollution controls, many others have to pay part of your bill. My only problem with the whole idea is that any tariffs should be used specifically for bioremediation, and my prediction is that they largely won't be.

Get rid of them all

[bill_mcgonigle]

If people really care about global warming and economic activity, they should read the latest IPCC report. It says that the best way to avoid warming is economic development. If the economy freezes in place (something a high carbon tax could do) then the warming will be about 4C by the end of the century. If the economy in all the "third world" countries develops into something like first-world conditions by the continued march of progress, then the warming will be closer to 1C.

Anything that stands in the way of that development is going to contribute to the warming. Removing these tariffs is a good thing, but to get maximum environmental benefit they need to get rid of the rest.

I know, Overton's Window and all.

What about subsidies?

[mattwarden]

The US uses tariffs to offset subsidies by China, for example, on PV panels. If you agree to eliminate the tariffs without addressing the subsidies, then it doesn't solve the problem, and it certainly doesn't "increase American exports" as the summary suggests. Of course, you'd have to eliminate the US's green subsidies, too.

I'm sure you're all in favor of that, right?