Protectionist Snares Along the Road to Copenhagen

March 26, 2009
Countries importing Chinese goods should be responsible for the heat-trapping gases released during manufacturing, a top Chinese official said yesterday…. "As one of the developing countries, we are at the low end of the production line for the global economy. We produce products, and these products are consumed by other countries.... This share of emissions should be taken by the consumers, but not the producers."

-Associated Press, March 17, 2009

The Copenhagen climate negotiations have already begun, as the world’s premier carbon emitters try various public gambits to bolster their positions. Consider, for example, the above-quoted statement by China’s top climate negotiator. While it is superficially clever, it will almost certainly backfire if anyone takes it seriously. The argument says, in essence, “We’re already doing you a favor by shipping you industrial goods that you no longer want to produce. So don’t expect us to pay the bill for their carbon emissions as well. You happily consume our offerings, so you should pay for their consequences.” This gambit shifts the trade perspective from Adam Smith to Emily Post -- or, perhaps, to a more ancient coda of ritual activity. It redefines international trade as a massive giving and receiving of favors, like an elaborate exercise in parlor etiquette. While it may have surface appeal, its proponent should have thought more carefully about its larger implications. For, if taken seriously, it will let a large, hungry, protectionist fox into the chicken coop. The fox can cheerfully choose from a large flock of chickens; here are two obvious pickings:
  1. “Fine, we agree – it’s really unfair to impose on you further, when you’re already laboring under the strain of offering these fine goods to us. So, accepting your complaint, we’ll remove this burden from your shoulders by taking measures to bring the carbon-intensive activities back home. While sacrificing to ease your pain, we’ll at least draw some consolation from the additional employment at a time when we desperately need it.”
  2. “You’re right – it’s unfair. So we’ll tax the carbon emissions embodied in your products at the US border, so U.S. consumers can pay for them.” Or, if the fox is primarily interested in blocking action on climate change:
  3. “You’re right – this is the way to do carbon accounting. Since we carbon-intensive Americans also export a lot, we want to assign emissions connected to our exports to the countries that consume our products. Of course, they’ll reciprocate and we’ll have to include that in deciding who’s accountable for what. Maybe we should defer doing anything about carbon emissions until we can solve this very complicated international accounting problem…”
You get the idea. Next gambit …?


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