European Climate Tariff Nixed—For Now

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As I noted in my dispatches from the U.N.'s climate change conference in Nairobi last month, some European officials are contemplating the imposition of countervailing tariffs on countries they regard as global warming scofflaws. That would most definitely include the U.S. But perhaps cooler heads have prevailed. The Financial Times reports:

The European Union's trade commissioner will on Monday dismiss French proposals for a "green" tax on goods from countries that have not ratified the Kyoto treaty as not only a probable breach of trade rules but also "not good politics".

Peter Mandelson says that the levy, aiming to cancel the competitive advantage of countries that are not cutting carbon emissions to fight global warming, would be "highly problematic under World Trade Organisation rules and almost impossible to implement in practice".

The proposals are gathering support after Günter Verheugen, industry commissioner, backed the idea after it was separately proposed by an advisory group of EU government officials and industry leaders he co-chairs.

"Not participating in the Kyoto process is not illegal. Nor is it a subsidy under WTO rules," Mr Mandelson will warn in a podcast speech to 50,000 subscribers. "How would we choose what goods to target? China has ratified Kyoto but has no Kyoto targets because of its developing country status. The US has not ratified but states like California have ambitious climate change policies."

You can be sure that this is an idea that is not going away. Whole FT article here

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  1. Can you say mindblowingly stupid trade war?

  2. At least they identified the real purpose of Kyoto – removing competitive advantage.

  3. At least they identified the real purpose of Kyoto – removing competitive advantage.

    That’s the first thing I thought when I read this.

  4. From the article…

    He accepts there will be some pain in the short-term for industry but this could be offset by services growth selling European environmental know-how.

    Here is where I think one of the scariest pushes lies.

    This argument starts with the broken window fallacy and ends with a call for corporate welfare. Unfortunately for the rest of humanity, it’s the developing world’s window, and Europe and California are the glaziers.

  5. …and Kyoto and the like are the rocks.

  6. I have considered and suggested such in the past. If such a scheme is to work, it must target individual goods and services, not host nations.

    A shipped item or ‘whatever’ should have a log of how much CO2 equivalent focing it has, and then some record of it’s offset being payed for. The the good is carbon neutral in production and shipping, then no tarrif is payed. If not then the tariff is applied, and that tariff goes to pay for an equivalent offset.

    Because of the immense protectionist nature, of such a tarrif, all other tariffs and subsidies and other artificial protections should be immediately ended. Too much of that sort of thing anyway.

  7. Sam, who is going to keep and verify these
    “logs” of carbon use? Cheating would be rampant, just like many have alleged with the number of calories one sees printed on foodstuff labels. Would transportation from plant to end-user count? How about the cost of gasoline used by workers commuting to the facility that made the product?

  8. Creech,

    On the bright side, the mounds of deadweight laws, regulations, and simple day-to-day paperwork would provide a carbon-neutral energy source.

    It remains an open question in environmental economics whether bureaucracy itself can generate enough paper to solve the global warming problem…

  9. “who is going to keep and verify these “logs” of carbon use?”

    Creech,
    No clue. But I will keep looking for a free market way.

    Chances are a broad statistical method will be used when verfiable third party certicates are not available.

    A fair Carbon Tariff is the hardest area of CO2 abatement to think of. But something like this would be necessary to bring freeloaders into the game. And to reiterate, a painful abandonment of subsidies and other protectionism is a must to really be able to be both fair in wrt Carbon Tariff, and to better adapt to whatever inevitable rapid climate change awaits us.

    Corruption worldwide is already something worth trying to fix. CO2 reduction adds another reason to fight it.

  10. Creech (part 2),
    the best way of course is for consumers to demand that producers supply evidence Carbon Neutral certification (or whatever). Our governments are big customers. Get Representatives to pass a law requiring such shopping acumen by our own governments, and it would be…up to the rest of consumers to follow through.

    Even without government as CO2-conscious-consumer, it is getting easier for ordinary consumers to do this.

  11. Also, as discussed here CO2 reduction and joining the Kyoto treaty don’t necessarily correlate.

  12. Meanwhile, all semblences and resemblences of sanity have vacated the field. Including, as far as I can tell, good old Ron.

    So let’s just tax the shit out of anything related to energy (which coincidentally includes pretty much anything you could imagine). How fast can you jam it through? The particular scheme you choose is really just a bunch of bullshit hair splitting.

    Of course we won’t impose this insanity on China or India because they’re developing nations. As opposed to California and Europe which are undeveloping nations.

    Remind me why it is that people — in the old days that is — used to try and stop suicides. Those must have been barbaric times back then.

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