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The Forum > Article Comments > Protectionist threats a lot of hot air > Comments

Protectionist threats a lot of hot air : Comments

By Geoff Carmody, published 5/10/2009

The threat of punitive tariffs on imports from countries not acting to reduce greenhouse gas emissions is a red herring.

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I'm sure the WTO resolved that carbon tariffs are allowed. One question is whether each imported product should get a detailed embodied carbon assessment, ranging from call centre services to machinery, or a general punitive tariff on all goods from that country. A bigger question is whether fear of retaliation might prevent their use. For example some believe China will run short of coal in just five years time and will want to import more from Australia. We could respond by saying no or perhaps cut a deal. The deal could be pay $50 carbon tax in lieu per tonne of coal or face 20% punitive tariffs on landed imports.

The question then is who gets the proceeds from the tariff? Perhaps Australia should hand back 50% of the customs duty for China to fund green programs there. Other legal perils remain. Suppose Australia said it was entitled to charge carbon tariffs because it offsets undiminished coal use by paying to preserve PNG forests. If China and India cry foul I presume it has to go before the WTO. Australian business execs will find themselves in jail and other unpleasantness. Still I think it would be good for a tough minded country like France to set the precedent for carbon tariffs and make everybody take notice.
Posted by Taswegian, Monday, 5 October 2009 8:34:34 AM
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The article implicitly recognises that Copenhagen must avoid the failure of Kyoto by coming up with an enforcement mechanism. It suggests this be done by introducing a WTO compliant GHG emissions tax to be levied by importing countries on the exports of producing countries. This appears to be the position of PM Rudd and Presidents Obama and Sarkozy.

Mr Carmody asserts that, to be WTO compliant, such a tax can only be permitted to the extent that it is applied internally by the importing country. Let us suppose that a country produces its electricity without burning coal, presumably that country would be in a position to place a high tax on the internal use of coal, knowing full well that this would have little if any effect within that country.

It could then impose a carbon tariff on the imported products of coal burning countries, equivalent to its internal rate tax and the extent to which coal was used in the production of each imported product. If this is a correct interpretation, it is hardly surprising that the President Sarkozy would support it since his country produces 85% of its electricity from
nuclear energy and most of the rest from renewable sources tidal, hydro, etc.

The effect would be that countries with the lowest emissions mostly the poorer less developed economies would be able to charge high tariffs on products from coal burning countries, thereby increasing the price of imports to purchasers, but would they or should it be a requirement that they do so?

Such a scheme would encourage importers to source their materials from countries burning least coal. Sounds like a sensible approach and one which would encourage exporting countries to reduce the need for coal burning to produce the energy needed for production of goods whether for export or internal consumption.

That of course is the name of the game but without an enforcing mechanism, nobody will play it.
Posted by JonJay, Monday, 5 October 2009 10:57:43 AM
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You can always tell when a government policy is either driven only by ideogoly, or a political adgenda. There is never a single important reason for for the policy, instead you get less & less plausible reasons given, almost every day.

You know the spin doctors have been given their head, to run with every fool idea they can come up with. This, in the hope that at least one will resonate with the damn masses, with which those poor pollies are saddled. Poor dears, it's a cross, almost too great to stand.

It would be fun, watching KRuddy squirm & wriggle, trying to get out from under, if it weren't for the fact that those masses will probably let him get away with his scam. He wants to deliver us tied & wrapped, to the UN in Copenhagen, to collect his brownie pionts.

I think our KRuddy is a very cunning bloke, as was Keating before him. Isn't it a pity that neither of them have been prepared to use their cunning on our behalf?

So we get carbon trading, & a daily dose of some bullsh1t justification of it, like this one.

I don't think I heard of anyone getting lynched after the Y2K scam collapsed, moore's the pity, so I suppose this lot, when the stuff hits the fan, will escape to the hills, to count their loot.
Posted by Hasbeen, Monday, 5 October 2009 12:42:05 PM
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No doubt this will be argued about and in some way or other be settled.
However it is an argument that is redundant.

All international world trade will decrease and all will become local.
After about five tears from now international trade, and indeed trade
within large countries such as the European Common Market, the USA and
Australia will become too expensive due to the costs of fuel.
There will be some exceptions to this where long distance railways
have been electrified and where high value low bulk products such
as integrated circuits need to be carried.

The writing is already on the wall with high volume products such as
furniture.
Posted by Bazz, Monday, 5 October 2009 1:43:54 PM
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