Monday, November 2, 2009

Carbon Tariffs Update: China's Timely Reminder

Reuters reports on a wholly unsurprising development out of China:
Proposals to impose "carbon tariffs" on countries that do not make efforts to reduce their CO2 emissions are unworkable and counterproductive, a Chinese trade representative said on Thursday.

Zhang Xiangchen, one of China's permanent representatives at the World Trade Organisation in Geneva, said "all countries should firmly oppose" the proposals, which have been raised by both the European Union and the United States.

"It is very difficult to have a unified standard for levying carbon tariffs and the starting point (for the proposals) is to restrict competition from China," he said on the sidelines of a conference.

"Frankly, if tariffs are being implemented unilaterally, they cannot be objective and cannot be non-discriminatory."...

The new U.S. climate bill now being deliberated by Congress includes a set of provisions that allow future administrations to impose "border adjustment measures" on imported goods, thereby restoring the competitive balance....

But China's Ministry of Commerce has already voiced its opposition to carbon tariffs, which it has described as "trade protectionism disguised as environmental protectionism".

"Up to now, whether it is the proposals in the U.S. climate bill or the comments by French President Sarkozy, the carbon tariffs are just a kind of deterrent used by developed countries to put pressure on developing countries, breaking the principle of 'common but differentiated responsibilities' and making them commit to their own emission cuts," Zhang told the conference.

He said retaliation would also be inevitable.

"The United States per capita emission rate is four times as big as China's. Does that mean we can impose 400 percent tax rates on all imported American goods? If so, the result is a global trade war that is good for no one and no use at all in the fight against climate change."
As the Reuters article indicates, Zhang's comments reiterate earlier statements from China that it opposes carbon tariffs in any form, and that the United States' unilateral imposition of such "border measures" would start a trade war.  But the statement remains noteworthy because of its timing: on the very same day that Zhang publicly repeated China's stance, the Senate's Environment and Public Works Committee was holding its second day of hearings on Cap and Trade legislation (aka "Boxer-Kerry") that includes a placeholder for the imposition of carbon tariffs.  And as CEI's Iain Murray points out, most of the hearing's participants were all too eager to embrace eco-protectionism as part of the Senate's final climate change legislation. 

So is it merely a coincidence that Zhang's strong reminder of China's opposition fell on the same day as the inaugural Senate hearings on Boxer-Kerry? 

I'm gonna go out on a limb here and say "no."

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