Carbon Conflict?
DK Matai
In the wake of the climate chaos summit in Copenhagen, some advanced
countries are talking about imposing carbon tariffs, which refer to
special carbon emission duties imposed on imports of carbon-intensive
goods.
The US Clean Energy and Security Act, passed by the House of
Representatives this year, first unveiled clauses related to carbon
tariffs. The legislation allows the US president eventually to impose
duties on imports of carbon-intensive goods such as steel, cement,
glass and paper from countries that have not taken measures to cut
their own emissions. The Obama administration seeks to stimulate the
world's largest economy with the help of the green industry.
The French National Assembly and the Senate voted in October and
November respectively to pass a proposal to tax carbon dioxide
emissions from 2010. According to the proposal, the French government
will apply a tax of 17 Euros (USD 25) per ton of emitted carbon
dioxide from January 1st, 2010. France has argued that the European
Union (EU) should introduce carbon tariffs if the international
community failed to reach an agreement at Copenhagen. France has been
an active supporter of carbon tariffs which could bring it potential
economic benefits, as the country enjoys a low-carbon economy with
most of its electricity coming from carbon-free nuclear plants.
New Carbon Economy
Advanced countries appear to be building a new carbon economic order
in the 21st century. In the US and Europe, carbon capitalism and
finance are beginning to take shape as relevant legislation, policy
and trade systems. Carbon-based checks on market expansion and
processes to secure competitive advantage are now nearing completion.
The key argument is that if the industrialised world has to accept
binding targets for reducing their greenhouse gas emissions, then
Beijing and Delhi must do the same. Workers in the industrialised
world cannot lose their jobs to China and India because those
countries are not participating in Green House Gas (GHG) cuts in a way
that is measurable, reportable and verifiable. This potential move by
the industrialised world has raised eyebrows globally and left
developing countries deeply concerned that it may be a disguised form
of trade protectionism. There appear to be three considerations when
deciding to levy carbon tariffs on imported products:
1. Creating more jobs in the developed world;
2. Protecting local industries; and
3. Regaining leadership in the global economy.
Carbon Tariff Threats
Western leaders are increasingly getting more open with threats to
make the most CO2-intensive imports more expensive with the help of
punitive tariffs. The argument goes that if the West protects the
environment via tariffs then climate sinners will not dump high carbon
intensity products into our markets. The Americans and Europeans even
tried to accommodate the possibility of unilateral penalties in the
final Copenhagen document, without success.
Carbon tariffs, if introduced, will not only undermine the global
drive to fight climate chaos, but also hurt global trade and economy.
It is not a new fear in the industrialised world, that aggressive
action on climate chaos could lead to local economic disadvantage. As
a result, many environmental lobby groups in the West have long been
calling for the establishment of a global emissions trade system with
markets. It is a simple and captivating idea for many: each state
gets a certain amount of CO2 allowances. Those who want to emit more
must buy emissions rights from other countries that emit less CO2.
Ideally, poorer countries would automatically make money, and rich
countries would at the same time have a financial incentive to reduce
their CO2 emissions. However, such a system only works if all states
participate — and industrialised countries' fears, that this won't
happen, were confirmed in Copenhagen. In particular, large emerging
economies like China and India wish to have minimal climate protection
obligations and to give their businesses competitive advantage in the
global market.
Geo-Political Balance
Copenhagen has shown that the world still has to find its new Geo-
political balance. French President Nicolas Sarkozy has repeatedly
called for EU punitive tariffs on products from big emitters, should
no meaningful agreement come from Copenhagen. Now that this has
occurred from a European perspective, the question is how serious the
European Union and its major countries are about this issue. The
French are now working together with Germany on such plans. Along with
Paris, Berlin is examining ways in which locational disadvantages for
business could be prevented.
World Trade Organization
The World Trade Organization (WTO) has disqualified ecological tariffs
as unjustified obstacles to trade. This is mainly due to an iron-clad
principle of international trade law: equal treatment. Identical goods
must be treated equally. It is irrelevant whether a laptop computer
was produced in an environmentally friendly, but more expensive manner
in the European Union or in a less ecological and less expensive
manner in China or India. This also applies to climate protection. As
a result, solving the problem with punitive carbon taxes is highly
problematic in terms of international trade law. Countries including
Sweden in the West and China and India in the East have criticised the
proposal of carbon tariffs for breaching the rules of the World Trade
Organization (WTO) and the principle of "common but differentiated
responsibilities" stipulated in the UN Framework Convention on Climate
Change (UNFCCC), saying it would seriously hurt the interests of
developing countries.
However, there is a window of opportunity with targeted interventions
in the world trading system to bring the worst polluters to reason —
or at least bring them back to the negotiating table. When it comes
to a few particularly environmentally damaging products such as steel,
cement, glass and paper it is possible to imagine punitive tariffs.
That would mean tariffs would be reduced for those goods which are
produced in an environmentally-friendly way. We are coming into a
phase, where individual countries such as France or trading blocs such
as the European Union may try out their own versions of carbon
tariffs, and see how far they could push or want to go. It is clear,
however, that the possible environmental penalties would be directed
mainly against developing countries. The industrialised world must now
ask itself the fundamental question of which products they want to
continue to produce abroad at much lower labour cost but much higher
environmental pollution? Co-operation between the North and the South
is the only way. A "Carbon Conflict" is the last thing that either
hemisphere needs during The Great Unwind and The Great Reset.
[ENDS]
We welcome your thoughts, observations and views. To reflect further
on this, please respond within Twitter, Linked and Facebook's ATCA
Open and related Socratic dialogue platform of HQR.
All the best
DK Matai
Chairman and Founder: mi2g.net, ATCA, The Philanthropia, HQR, @G140
To connect directly with:
. DK Matai: http://twitter.com/DKMatai
. Open HQR: http://twitter.com/OpenHQR
. ATCA Open: http://twitter.com/ATCAOpen
. @G140: http://twitter.com/G140
. mi2g: http://twitter.com/intunit
- ATCA, The Philanthropia, mi2g, HQR, @G140 --
This is an "ATCA Open, Philanthropia and HQR Socratic Dialogue."
The "ATCA Open" network on LinkedIn and Facebook is for professionals
interested in ATCA's original global aims, working with ATCA step-by-
step across the world, or developing tools supporting ATCA's
objectives to build a better world.
The original ATCA -- Asymmetric Threats Contingency Alliance -- is a
philanthropic expert initiative founded in 2001 to resolve complex
global challenges through collective Socratic dialogue and joint
executive action to build a wisdom based global economy. Adhering to
the doctrine of non-violence, ATCA addresses asymmetric threats and
social opportunities arising from climate chaos and the environment;
radical poverty and microfinance; geo-politics and energy; organised
crime & extremism; advanced technologies -- bio, info, nano, robo &
AI; demographic skews and resource shortages; pandemics; financial
systems and systemic risk; as well as transhumanism and ethics.
Present membership of the original ATCA network is by invitation only
and has over 5,000 distinguished members from over 120 countries:
including 1,000 Parliamentarians; 1,500 Chairmen and CEOs of
corporations; 1,000 Heads of NGOs; 750 Directors at Academic Centres
of Excellence; 500 Inventors and Original thinkers; as well as 250
Editors-in-Chief of major media.
The Philanthropia, founded in 2005, brings together over 1,000 leading
individual and private philanthropists, family offices, foundations,
private banks, non-governmental organisations and specialist advisors
to address complex global challenges such as countering climate chaos,
reducing radical poverty and developing global leadership for the
younger generation through the appliance of science and technology,
leveraging acumen and finance, as well as encouraging collaboration
with a strong commitment to ethics. Philanthropia emphasises multi-
faith spiritual values: introspection, healthy living and ecology.
Philanthropia Targets: Countering climate chaos and carbon neutrality;
Eliminating radical poverty -- through micro-credit schemes,
empowerment of women and more responsible capitalism; Leadership for
the Younger Generation; and Corporate and social responsibility.