Sunday, July 26, 2009

Germany Hates on Carbon Tariffs. Wunderbar.

Reuters reports on some interesting stuff out of Sweden, with Germany openly smacking down a French(shocking!) plan to impose carbon tariffs on imports from countries that have chosen not to cripple their economies with new laws on climate change (formerly known as "global warming," and "global cooling" before that):
Germany called a French idea to slap "carbon tariffs" on products from countries that are not trying to cut greenhouse gases a form of "eco-imperialism" and a direct violation of WTO rules.


Matthias Machnig, Germany's State Secretary for the Environment, told a news briefing on Friday that a French push for Europe to impose carbon tariffs on imports from countries that flout rules on carbon emissions would send the wrong signal to the international community.

"There are two problems -- the WTO (World Trade Organization), and the signal would be that this is a new form of eco-imperialism," Machnig said.

"We are closing our markets for their products, and I don't think this is a very helpful signal for the international negotiations."

European environment and energy ministers are meeting in Sweden to try to come up with a single vision of how the 27-member bloc will fight global warming, ahead of a major environment summit in Copenhagen.


The U.S. House of Representatives has already passed legislation that contains carbon tariffs. It would allow the United States to impose duties on imports of carbon-intensive goods such as steel, cement, paper and glass from countries that have not taken steps to reduce their own emissions.

Some say such tariffs could be a backup plan for Europe, should United Nations members fail to reach a deal in Copenhagen.

But Swedish Environment Minister Andreas Carlgren, whose country holds the rotating European Union presidency, said member states currently had no "plan B" beyond landing a deal in Copenhagen. He said there was as yet no official proposal on the table from the French regarding carbon tariffs. "We are absolutely against each try to make use of green protectionism," Carlgren told Reuters. "There should be no threat of borders, of walls or barriers for imports from developing countries."

French President Nicolas Sarkozy's office said last month such taxes could help create a "level playing field" for European companies competing with international firms from countries that have not put a price on carbon emissions.

EU Energy Commissioner Andris Piebalgs has said member states should keep the French proposal in mind, but also worries how such tariffs could be viewed by other countries.

"Eco-imperialism." I like it. Quite interesting that Germany and other European nations are publicly asserting that carbon tariffs would violate WTO rules. I wonder what Paul Krugman thinks of that news, considering that he boldly (and baselessly) asserted their WTO-legality a few weeks ago.

In reality, the issue of whether carbon tariffs violate WTO rules is sticky and unsettled, and any WTO panel decision would be highly fact-specific. Hence, Krugman's unqualified statements, as well as Reuters' synopsis of the issue in the full article, should (unsurprisingly) be ignored. It's just not that simple.

It does make me wonder whether the Euros are - at least in part - directing their comments toward the US and the carbon tariff provisions in Waxman-Markey (see below).

Speaking of that, I wonder how this news will go over here in the US. If I'm the GOP, I'm blasting from high heaven that not even our more "eco-enlightened" friends across the pond are comfortable with one of the key aspects of Waxman-Markey (the tariff provisions were inserted in the bill to sell it to rust-belt Dems in the House).

And it'll probably give the President a little more cover for his (welcome) statements opposing them. Assuming he still does oppose them, of course. (It's hard to keep track.)

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