The carbon tariff looks pretty good to me by mattsteinglass
November 18, 2009, 9:36 am
Filed under: Environment

I’m hesitant to write this kind of thing when I blog on “Democracy in America”, because free trade is pretty much viewed as gospel over there. And I’m generally pretty pro-trade too. But lord help me, when I read this piece by Jake Schmidt at Grist about the modestly encouraging things Hu Jintao and Barack Obama agreed to say in their joint communique in Beijing the other day, it makes me think…that Lori Wallach and Fred Bergsten were exactly right the other day in their Washington Post op-ed calling for tough, enforceable carbon tariffs as part of the cap-and-trade bill the US Congress is considering.

Here’s the thing. Chinese leadership is quite serious about reducing carbon emissions, or rather reducing the carbon output per dollar of the Chinese economy. They take climate change seriously; they accept the logic, the science and the rhetoric. The same is true in Vietnam. But like Vietnam, the Chinese government has very limited ability to enforce its writ across China via the mechanism of law. So when Schmidt writes that he’s encourage that the joint Obama-Hu communique says the two countries “resolve to take significant mitigation actions and recognize the important role that their countries play in promoting a sustainable outcome that will strengthen the world’s ability to combat climate change,” I think: yeah, we’ll see what happens with that.

It’s not that countries like China and Vietnam lack the governing capacity to achieve results. In fact, when they identify top-priority issues, they can achieve vast results much faster and more sweepingly than a hidebound, rule-governed democracy like the US can. If China decides it wants to build 50 gigawatts’ worth of wind farms within 3 years, I have no doubt it will happen. But what countries like China and Vietnam can’t do well is rule-of-law stuff: enforcing pollution standards, tax regulations, and so on. And that kind of regulatory enforcement is exactly what emissions reduction schemes based on cap-and-trade or carbon taxes require. China and Vietnam respond incredibly effectively to monetary, commercial and strategic incentives. They don’t respond well to the challenge of making and enforcing rules.

So that’s why I think carbon tariffs would be so effective. If American and European agencies enforced tariffs based on measurable carbon emissions from Chinese industry, it would drive China’s export-oriented economy to reform with incredible speed. Global agreements on CO2 emissions reductions are goal number one, but carbon tariffs provide us with a way to trust, but verify.


1 Comment so far
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I’m not sure your other masters mind the carbon tariff. As long as it is designed to insure the social cost of emissions are paid globally, it isn’t really a trade barrier and its purpose is to prevent trade distortions not create them. It’s a good idea, which probably means it will be bad legislation but for now, lets all enjoy the sensibility.

Comment by citifieddoug

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