Can the US best reduce global CO2 emissions by reducing trade with China?
Posted on November 20th, 2009 by admin
US manufactures are more efficient and produce less CO2 than their Chinese competitors.
http://americaneconomicalert.org/view_art.asp?Prod_ID=3225
Should the Obama administration put a high carbon tax on Chinese imports (and other high emission countries)? Can Americans go green and reduce their $200 per person per month trade deficit by buying US made goods?
Several thoughtful answers. Lets see where the vote goes.
I think this question is somewhat backwards: if CO2 emissions are priced into the cost of goods, American producers will have a competitive advantage over China and imports from China will be reduced. China has a smaller economy than the USA despite greater CO2 emissions and 4 times the population. This says something about efficiency and competitive advantage.
Whether trade is reduced is another question. China could just as easily trade US bonds for goods as the reverse. This might not fit with China’s policies, but the current policy isn’t in the interest of the USA or the world so it makes no sense to continue it.
November 20th, 2009 at 6:53 am
Well the good news is that China is likely to sign the agreement at Copenhagen, so they won’t be able to continue emitting large amounts of CO2 either.
http://money.aol.com/article/china-hopeful-about-copenhagen-climate/495107?icid=sphere_blogsmith_inpage_dailyfinance
Tracking the carbon footprint of imported products and taxing them accordingly would be an effective solution, but a very difficult one to implement. I don’t know how the Chinese and other foreign countries would react to such a measure, either. But ideally speaking yes, this would be a good solution. I just don’t know how well it would work in practice.
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November 20th, 2009 at 7:31 am
I might surprise you but I DO NOT AGREE
The reason is simply that China and the US have roughly the same emission intensity per unit of GDP produced.
Also China has a more efficient plants in heavy industry than the US simply as they are of a much larger scale and recent.
The border adjustement you are talking about would only allow the US companies to reduce their emissions fast without suffering too much carbon leakages.
This being said, free allowances achieve just the same.
Ideally, an OECD wide climate market will be created which will largely keep free trade without the need for a border adjustement, allow OECD wide the sourcing of the cheapest emission reduction options and also… act as a fence against the import of any bogus emission credits such as russian AAUs (hot air=emission reduction from the business as usual collapse of the soviet industry).
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PS:
1) The Chinese heavy industry mainly serves the huge domestic demand - international trade is limited.
2) Only a selected number of products are at risk
3) China has done more than the US in the field of energy efficiency up to now.
4) Only selected products in China have a huge effect on emissions. For example aluminium which consumes mostly electricity would source its power from additional coal in China while it could source its power from renewables in Canada or Brazil.
Let me give you a good trick to reduce the trade deficit: implement energy efficiency. Reducing the demand for oil and gas reduced the marginal imports as well as prices on international markets (much more than the "drill baby drill") as both volumes and prices of imports are decreased - the variable costs are replaced by fixed capital investments with predictable returns on investments.
Global Status Report on Energy Efficiency:
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http://www.reeep.org/file_upload/5272_tmpphpe8lv2U.pdf
SPECIAL EDIT @Cool D
I love the "for God’s sake…. kill".. we might there deeply differ in religious views. I was told to love.
November 20th, 2009 at 7:46 am
Yes, we could reduce emissions, but it won’t happen. Americans would rather buy cheap and often rather than a little more expensive and lasting. We couldn’t add import taxes, because China owns too may US securities. It would be a tit-for-tat and nothing would be accomplished. It’s the American people who must change, but it’s pretty hard to when everything is made in China. We’ve painted ourselves into a corner with our greed and impatience.
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November 20th, 2009 at 8:34 am
I notice you alarmists hate free markets. At every opportunity, you want to reduce free trade. Free trade with China has caused a prosperity to Chinese that has never happened before. Much of the prosperity is returned to us when they buy our goods. Whats the use. Some people will only be happy when we become Maoist and Chinese go back to the way they were.
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November 20th, 2009 at 8:39 am
This country is green okay, lets either make the communist go green, or nuke them. Ain’t no dang gone reason why i should have to pay the freaking government to breath air. For gods sakes i wash dish for a living, because Chinese people put my small printing business under .
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November 20th, 2009 at 8:45 am
I think this question is somewhat backwards: if CO2 emissions are priced into the cost of goods, American producers will have a competitive advantage over China and imports from China will be reduced. China has a smaller economy than the USA despite greater CO2 emissions and 4 times the population. This says something about efficiency and competitive advantage.
Whether trade is reduced is another question. China could just as easily trade US bonds for goods as the reverse. This might not fit with China’s policies, but the current policy isn’t in the interest of the USA or the world so it makes no sense to continue it.
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November 20th, 2009 at 9:26 am
We need to keep our eye on the ball, and remember the direction we want to go. Is the question about fighting global warming or reducing trade with China? Products not bought from China will have to be made in the United States or bought elsewhere. Shall we ban the importation of Hummers from China, after General Motors sold the Hummer division to a Chinese company?
A $200 import tax from high emissions countries could help fund our fight against global warming and greenhouse gases. That said however, it must be rememeber what we are trying to achieve. The best way to sequester carbon dioxide is not to store it underground for thousands of years, but to find ways to make use of it and creating an economic benefit. The simplest method of doing this is to grow crops with increased concentrations of carbon dioxide. This is called carbon dioxide enrichment. Depending upon the crop yeild can be around 30% more than normal by this method.
There is no reason that the United States of America has to follow a lets-all-do-this approach. Indeed if there is a climate crisis, we must not be satisfied with half-measures, and a lets do this a little bit at a time approach.
According to the Worldwatch Institute’s report on carbon emissions in Vital Signs 2001, during 1997-2000, the amount of carbon emissions worldwide decreased, while during the same years, 1997,1998,1999, and 2000, the concentration in parts per million of carbon in the atmoshere increased.
This shows that modest decreases in the amount of emissions of carbon dioxide into the atmosphere is insufficient to to stem the tide of increasing concentrations of carbon dioxide in the atmosphere.
More damatic efforts must be made if the upward trend in the concentration of carbon dioxide worldwide is to be reversed. To achieve this goal the United States of America needs to take the lead and implement a Zero Net Carbon Emissions Policy. This plan would recycle and reuse all carbon dioxide emissons created in the United States of America. Several countries have already pledged to achieve this goal: Costa Rica, Norway, Greenland and New Zeland.
China has been reluctant because we have not even adopted our own policies for fighting global warming. A commitment made by the United States of America to make Zero Net Carbon Emissions a reality in the United States as quickly as it can be achieved would demonstate to the world that we take this issue seriously and are concerned about the effects that global warming can have on the United States of America and the whole wide world.
The sooner Zero Net Carbon Emissions is accomplished the better off everyone in the world will be!!!!
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November 20th, 2009 at 9:40 am
If we put a tariff on Chinese imports, then prices would go up and companies will have to adjust by raising their selling prices. This would lead to more domestic buying and help our economy a little, but then China can decide to "call in" our debt to them and even tax our companies operating over there. That would create major problems to our economy and the global economy….again. The best thing to do is to persuade China to to lower emissions and financially help them do it. This would be the better investment. I am a firm believer in buying domestic products even if it costs 10% more, but during the current and previous recessions, lower and middle class families began to rely heavily on the cheap foreign (Chinese and Mexican) made products. There are many pros to this scenario, but unfortunately, many cons too. It would not be easy to accomplish. Persuasion is our best method.
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