President Obama on Sunday praised the energy bill passed by the House late last week as an “extraordinary first step,” but he spoke out against a provision that would impose trade penalties on countries that do not accept limits on global warming pollution.
“At a time when the economy worldwide is still deep in recession and we’ve seen a significant drop in global trade,” Mr. Obama said, “I think we have to be very careful about sending any protectionist signals out there.”
He added, “I think there may be other ways of doing it than with a tariff approach.”
Broadly speaking I don’t like tariffs. But I do see them as necessary in at least two cases, one to protect fledgling industries and two to stop free-riding.
Tariffs on those who will free-ride pollution targets seem pretty important to me.
Sorry Obama — I think you’ve got this one wrong.
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Hmmm… nope I think he’s right & you’re wrong.
Why?
1) historically green trade restrictions have been very poor at delivering environmental goods and very good at being back door protectionism – see debates at the WTO about Non-tarrif barriers
2) Let’s be realistic this *is* back door protectionism and it’s aimed at China. Rich countries and poor countries under the UN climate convention have different obligations – rich countries need to deliver obligatory emissions cuts and poor countries need to try & develop sustainbly, given support from rich countries to do so. So these ‘border tax adjustments’ would be aimed at poor countries – specifically China who the US is unreasonably terrified of.
3) Last but not least the track record of rich countries in delivering emissions cuts or finance for poor countries to cut their emissions and adapt to climate change is awful. Would be nice to see SOME leadership before they run around trying to penalise everyone else.
It’s not about stopping free-riders… it is about recognising that rich countries and poor countries will act differently and poor countries shouldn’t be punished for that.