Monday, July 31, 2006

Getting China and India onboard

You often hear the statement that China and India will never sign on to any agreement that requires them to reduce greenhouse-gas emissions because it will hurt their economic growth. See, for example, this editorial, where they argue:
Consider China and India, the world's emerging economic powerhouses. Ecstatic over their rapid ascent from mass poverty, both nations do not see shuttering their manufacturing and industrial plants to remedy a problem created mostly by the United States and Europe as an opportunity. They see it as a bad joke. So Beijing opens about one new coal-fueled power plant each week and New Delhi reduces environmental regulations on the mining industry and both tolerate air pollution so extreme it makes Los Angeles seem like Eden.
This argument, however, misses the fact that there are ways to encourage countries like China and India to join an emissions reduction regime. Imagine, for example, that the U.S. and Europe join together to reduce emissions. As part of the agreement, they could apply tariffs to imports from countries that are not working to reduce emissions. If the cost of implementing the emissions reductions is less than the costs of lost exports, then China and India will immediately sign up.

7 comments:

EliRabett said...

Worse, it is ahistorical given the example of the Montreal Protocols. The arguments about China and India are simply recycling of what we heard about how they would pump out infinite amounts of CFCs so why bother restricting the emissions from developed nations.

In short, given that the denialists got it wrong on CFCs and developing nations, why believe a word they now bleat about developing nations and carbon emissions.

Welcome to the world of blogs. I look forward to many useful exchanges.

Andrew Dessler said...

Eli-

Over on prometheus a few weeks ago, I had a long argument with the usual suspects on this exact point. My point was basically that many of the same arguments one hears today were used during the battle over phase-out of CFCs ... and they were wrong then. That doesn't mean they're necessarily wrong now, but it does mean we should view them skeptically.

Regards

EliRabett said...

Let me go a bit further. With the CFCs it was clear that India and China were not fully invested in the technologies to synthesize and use the CFCs. The marginal cost to them for switching to HFCs and other replacements was very low, moreover, as their manufacturing began to source appliances to the developed world, they obvously would use the HFCs.

The same situation applies to carbon emissions in spades. First, the manufacturing base in India and China and India is directed to the developed world, as manufacturing for domestic markets ramps up it will use the more efficient technologies. Second, as capital flows into India and China it will be used to replace hugely inefficient domestic systems for heating, cooking and building.

It is important to understand that carbon emissions in China are tightly coupled to coal.

As to the other place...well, I am happy you took up the challenge.

David said...

Perhaps India and China can be leveraged, but I'm not sure tariffs on their imports would work. Such tariffs are prohibited by the WTO, and there's no prospect that WTO rules could be altered to allow this kind of linkage to climate change. Another mechanism for influencing China and India would need to be found.

Andrew Dessler said...

David-

Thanks for your comments. The legality of tarrifs is indeed somewhat hazy, although their prospects appear substantially more promising following a series of crucial recent WTO decisions: see e.g., Howse, R. (2002). The Appellate Body Rulings in the Shrimp/Turtle Case: a new legal baseline for the trade and environment debate. Columbia Journal of Environmental Law, 27(2), 489–519.

Regards.

David said...

Tariffs can of course be used to advance certain environmental objectives---Article XX of the GATT ensures that. The journal article you cite describes a case of tariffs being used to ensure the conservation of exhaustible natural resources, which is permitted under certain conditions. My point would be that there's no plausible scenario under which Article XX could be used to advance global warming objectives in the manner you described in your post (imposing tariffs on Indian and Chinese goods in retaliation for their not reducing emissions of greenhouse gases). This isn't really a matter of law as much as it is of politics, I think. Perhaps the politics of these issues will change---maybe that's your point about not being pessimistic---but we certainly have a long way to go.

ttyler5@hotmail.com said...

This is truly a great area of concern, for example, in a discussion on Kyoto at Eric Berger's SciGuy blog a few weeks ago, I commented that we, the US, had nothing to gain from signing because anything we did to reduce emissions would be overwhelmed by emissions from industrial expansion in emerging economies exempted from strict standards in the accord. Berger replied that this is precisely why we did not sign on.

Another plank in the approach to the problem posed by the industrial growth of India and China would be to also tie such trade agreements as you suggest above to technology transfers, ie, obviously, Japan, the US and western Europe are going to beat the emerging industrial powers in the process of developing and implementing hybrids, fuel cells, etc.

If we can help, aid and otherwise cajole the emerging industrial nations onto this track early in the game, we might be able to cut down the time it would take them to transition on their own under pure market forces, which I think would favor the production of old-fashioned fuel burners in those nations for some time due to the lower production costs.