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April 22, 2013

Europe's Cap-and-Trade Scheme Failing Spectacularly

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Whether or not you accept the scientific data on climate change (you should!), it is common sense that pumping more and more carbon dioxide into the atmosphere isn't the best idea in the world. Since scientists are unsure how much the temperature will change in response to CO2 levels, the "conservative" thing to do is to be cautious. After all, simple physics tells us that, over time, more carbon dioxide will lead to a warmer planet.

Therefore, finding ways to reduce our carbon emissions is good policy. Generally, there are two ways proposed to do it: A smart way and a dumb way. You can probably guess which one the European Union implemented.

First, the smart way: A corrective tax (a.k.a. Pigovian tax) applied on fossil fuels would be an easy, straightforward method to reduce carbon emissions. Dirtier fuels (e.g., coal and oil) would pay the highest tax, while cleaner fuels (e.g., natural gas) would pay less. Nuclear, solar, wind and other clean energy sources would pay none at all. The size of the tax would always be known, so companies could plan accordingly.

Then, there's the dumb way: Cap-and-trade. It's not that it can't be successful; cap-and-trade helped mitigate the scourge of acid rain. But, as Hank Campbell and I wrote, it suffers from considerable drawbacks, such as unpredictable price fluctuations and the creation of an inefficient, complex bureaucracy which can lead to corruption. This fosters a chaotic atmosphere that is not only bad for business, but undermines public confidence in governments' ability to reduce CO2 emissions.

Back in 2005, the European Union launched its Emission Trading Scheme (ETS), and as the New York Times reported on Sunday, it is failing spectacularly. Why? Because of "serious flaws in the design of the system," as The Times writes. It goes on to say:

This year has been stomach-churning for the people who make their living in the arcane world of trading emissions permits. The most recent volatility comes on top of years of uncertainty during which prices have fluctuated from $40 to nearly zero for the right to emit one ton of carbon dioxide.

There's that pesky price fluctuation we warned about. Too high of prices will hurt business, but too low of prices will undermine the entire point of the scheme. It's supposed to cost money to emit CO2, but if carbon is cheap, then there is no incentive to reduce emissions. And that's exactly what happened.

[A]t current levels, [prices] are far too low to change companies' behaviors, analysts say. Emitting a ton of carbon dioxide costs about the same as a hamburger.

To increase prices, carbon emission permits are supposed to be withdrawn from the market, decreasing the supply and increasing the price. But, given the poor state of Europe's economy, the European Parliament didn't want to do that. Thus:

[O]ver time, the declining prices for the credits have sapped the European market of value, legitimacy and liquidity — the ease with which the allowances can be traded — making it less attractive for financial professionals.

Furthermore, the EU Observer reported in 2009 that the ETS is "a magnet for tax fraud on a grand scale, costing government coffers around €5 billion euros." And to add insult to injury:

Europol, Europe's criminal intelligence agency, said that as much as 90 percent of the entire market volume on emissions exchanges was caused by fraudulent activity, undermining the very viability of the ETS just as the EU is touting a similar scheme for the rest of the world. [Emphasis added]

Unpredictable price fluctuations? Check. Inefficient bureaucracy? Check. Corruption? Check. Undermining public confidence? Check.

I'm not the sort of a person who does an "I told you so" dance, but, well ... I told you so.

(Image: AP photo)

March 15, 2013

Here's How Global Warming Will Alter Global Shipping

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This image, published by the Proceedings of the National Academy of Sciences (via Fortune), shows a computer model of what "Supra-Polar" shipping routes will look like if global warming proceeds as expected. As you can see, a melting Arctic will open up a vast swath of ocean, including the Northwest Passage, which is expected to shave 30 percent of the distance to and from North America compared to the current Northern Sea Route, which hugs the Russian coastline.

By mid-century, the shortest route to travel from the Atlantic to the Pacific will be the North Pole.

The melting ice not only introduces unpredictable environmental variables, it also deals a blow to Russia's strategic position. As Jennifer Abbasi notes, Russia charges fees for vessels operating in its exclusive economic zone. As the ice opens up and more vessels can range beyond Russia's territorial waters, they'll lose out on their cut.

January 24, 2013

UN: The World Is Eating More Food Than It Is Growing

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Asia Sentinel reports that global food reserves are dropping:

The US, which experienced record heat waves and droughts in 2012, now holds in reserve a historically low 6.5 percent of corn (maize) stocks, the FAO warned, with prices rising to record levels during the crop failure. The US is the world's largest exporter.

Overall, food consumption has exceeded the amounts grown during six of the past 11 years, officials say, as the world has teetered on the edge of crisis only to recover somewhat. Countries have run down reserves from an average of 107 days of consumption in 2002 years ago to under 74 days recently.

While analysts don't believe rising prices will trigger the kind of crises seen in 2008 and 2011, when the world faced structural deficits in wheat and rice, they are concerned that high prices are driving the world's poorest people out of their ability to feed themselves.

Rising prices are also sparking geopolitical competition as countries race to secure resources. A recent report from Chatham House argued that "resource insecurity has come back with a vengeance."

(Graphic: Chatham House)

January 23, 2013

NASA's Climate Data Condensed

NASA has compiled a short graphic with their climate change data dating back to 1950. It speaks for itself.

November 30, 2012

The Global Quest for a Better Car Battery

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Steve LeVine says the race is on:

As China continues its massive push in renewable energy, the Obama administration is doing so as well, betting another $120 million to win the global race for a better battery. The administration is allocating the money to a Bell Labs-style project that, over a five-year period, is intended to push the boundaries of current technology and create far more powerful transportation and stationary batteries.

The initiative is pitted against competing efforts in China, France, Israel, Japan, South Korea, the United Kingdom and elsewhere. It will be headquartered at Argonne National Laboratory, south of Chicago, which won the project this week in a competitive bid filed jointly with a team of US universities, companies such as Dow and Johnson Controls, and other national labs.

Even with the Solyndras and A123 Systems of the world, the U.S. is still flushing considerably more money down the tubes policing the Persian Gulf for the purposes of energy security. Subsidizing battery research to the tune of $120 million seems like a no-brainer.

(AP Photo)

October 11, 2012

Bad News: Global Food Supply Edition

The last thing the world needs is more bad news, but there's more bad news on the global commodities front:

Wheat rose the most in nearly two weeks after the U.S. Department of Agriculture lowered its forecast for global stockpiles and said domestic cattle producers would use more of the grain as livestock feed.

Global stockpiles will be 173 million metric tons on May 31, down from 176.71 million estimated on Sept. 12, the USDA said today in a report. World production was forecast at 653.05 million tons, down 0.9 percent from last month. About 315 million bushels in the U.S. will be fed to cattle, up from last month’s prediction of 220 million, the USDA said.

“The wheat crop in Russia is down, Canada is down, Australia is down,” Jason Britt, the president of brokerage Central States Commodities Inc. in Kansas City, Missouri, said by telephone. “There seems to be a trend.”

Meanwhile, the UN is issuing a broader warning:

According to the Food and Agriculture Organisation (FAO) in Rome, global wheat production is expected to fall 5.2% in 2012 and yields from many other crops grown to feed animals could be 10% down on last year.

"Populations are growing but production is not keeping up with consumption. Prices for wheat have already risen 25% in 2012, maize 13% and dairy prices rose 7% just last month. Food reserves, [held to provide a buffer against rising prices] are at a critical low level

"It means that food supplies are tight across the board and there is very little room for unexpected events," said Abdolreza Abbassian, a senior economist with the FAO.

Maybe now would be a good time to re-examine the (insane) policy of burning food to fuel our cars.

September 6, 2011

The Race for the Arctic: Airship Edition

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It's well known in security circles that the melting of Arctic ice is creating a series of new challenges and opportunities for many of the world's Arctic powers - from newly accessible hydrocarbon resources to shorter shipping lanes through the Northwest Passage. But sea travel is not the only route through the Arctic's treacherous terrain. The photo above depicts an "airship" developed by the British firm Hybrid Air Vehicles and ordered by Canada's Discovery Air Innovations to service Canadian mines in the far north of the country.

According to Keith Barry, the ship is capable of lifting 50 tons and can deliver its freight to frigid and inaccessible climes at a quarter of the cost of the alternatives. And if you're worried about a Hindenburg redux, don't. "New ships have rigid envelopes that eliminate the need for a frame, and they are filled with nonflammable helium. Hybrid aircraft can even be heavier than air, taking off like a conventional airplane and landing softly like a hovercraft," Barry writes.

(Image: Discovery Air Innovations)

August 29, 2011

Clueless on Carbon

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According to Gallup:

Residents in the top five greenhouse gas-emitting countries are no more aware of global warming or climate change than they were a few years ago. Majorities in all five countries Gallup surveyed in 2010 -- except India -- continue to say they know at least something about the issue.

April 27, 2011

The New Geopolitics of Food

Foreign Policy magazine hosted an event yesterday in Washington with Lester Brown, president of the Earth Policy Institute, to chat about their food issue and his cover article on the "New Geopolitics of Food." Brown's survey piece is worth reading for a host of fascinating details and data points - his politics are old-guard leftist, and his predictions of a future with "every-country-for-itself philosophy" for food provision seem very throwback to me, but the information is worth gathering to draw your own conclusions about the issue.

Contra reports by The Economist and others in recent months, Brown believes the problems in food supply are not a temporary issue, but a long-term and rising problem. China's situation is particularly interesting, as with an expanding middle class has come, as anticipated, a growth in meat and protein demand. China consumes twice the meat of the U.S. today, according to Brown, and while it today produces roughly 14 million metric tons of soybeans, it consumes more than 70 million (not just as foodstuffs but as feed for animals). The ripple effect is obvious: today, more land in the United States is filled with soybeans than wheat, and China imported roughly 22.5 million metric tons of soybeans from the States last year, an increase of about 20 percent from 2009. Meeting this demand, according to Brown, could soon become a challenge.

Brown pointed out one story I'd missed completely - that South Korea, in what could be a trend followed by other nations, decided a few months ago to bypass international markets entirely, setting up an office in Chicago to buy directly from grain producers in America. He noted the problems of winter wheat crops in the U.S. and Russia from the past year, which just translate to annoyance on the part of Americans, can be calamitous for other nations. And his take on the "water bubble" in the Middle East is interesting:

While temperatures are rising, water tables are falling as farmers overpump for irrigation. This artificially inflates food production in the short run, creating a food bubble that bursts when aquifers are depleted and pumping is necessarily reduced to the rate of recharge. In arid Saudi Arabia, irrigation had surprisingly enabled the country to be self-sufficient in wheat for more than 20 years; now, wheat production is collapsing because the non-replenishable aquifer the country uses for irrigation is largely depleted. The Saudis soon will be importing all their grain.

Saudi Arabia is only one of some 18 countries with water-based food bubbles. All together, more than half the world's people live in countries where water tables are falling. The politically troubled Arab Middle East is the first geographic region where grain production has peaked and begun to decline because of water shortages, even as populations continue to grow. Grain production is already going down in Syria and Iraq and may soon decline in Yemen. But the largest food bubbles are in India and China. In India, where farmers have drilled some 20 million irrigation wells, water tables are falling and the wells are starting to go dry. The World Bank reports that 175 million Indians are being fed with grain produced by overpumping. In China, overpumping is concentrated in the North China Plain, which produces half of China's wheat and a third of its corn. An estimated 130 million Chinese are currently fed by overpumping. How will these countries make up for the inevitable shortfalls when the aquifers are depleted?

Some of Brown's points run afoul of typical categorization. He maintains the lessons of the past decade is that export bans don't work, with major blowback on trade restrictions (particularly in Southeast Asia), and that the decision of the U.S. and the European Union to invest in biofuels has had terrible consequences.

Yet when it comes to Brown's policy recommendations and the American left's solutions on food policy - population restriction, carbon caps, sin taxes, meat rationing (proposed straight-faced by one participant) - strike me as particularly tired and unlikely to work in the real world. Brown views this as a problem of overpopulation and climate, setting the solution to food problems as one where scientists triumph over economists; I think it's more likely a problem driven by poor governance and market barriers.

The real question for me hinges on the future of Subsaharan Africa. If it can be remade, by the Gates Foundation and others, as new breadbasket - the barrier to which is proper water and transportation infrastructure, not land - through proper technological investment and development, it will provide another source to meet demand. In all, I'm more confident in technological advancement to meet market demands for more supply, and that fears of "peak food" are enormously exaggerated.

March 30, 2011

Millennials and Climate Change

Greg Scoblete noted an interesting Brookings study of Millennials' views on foreign policy and the world. Not surprisingly, they are a bit toward the isolationist side of things. Somewhat surprisingly, they correctly identify China as a significant threat for America in the long run - I'd have thought Iran, North Korea and other nations punching outside their weight class would've been the prevalent choice.

But Greg noted one stat which surprised me even more:

Among the top challenges for the future, Millenials identified terrorism at the top (31.6 percent) followed by climate change (12.8 percent), nuclear proliferation (11.5 percent) and global poverty (10.7 percent).

I actually said "Wow" when I read this. That's incredibly low for climate change and global poverty, particularly when you consider how much talk of global warming dominated the political discussion just a few years ago. What happened? Well, the economic downturn made carbon taxes less appealing, the loss of several key political leaders blunted enthusiasm, movement leaders lost steam post-Kyoto and, of course, the number-fudging scandal in the UK (which did more damage than some in the green movement are even today ready to recognize).

I think, however, that there might be something more fundamental going on here. Katherine Miller, one of the most perceptive Millennial social critics - and happens to be an actual member of the generation (an essential qualifier) - noted in response that one shift we're seeing is that the climate issue was absorbed into a larger holistic approach which localized the issue. She maintains that the "issue went mainstream, in bite-size everyday chunks where your favorite restaurant boasts green practices," creating a positive payoff at the local and personal level.

Continue reading "Millennials and Climate Change" »

March 24, 2011

Biofuels and Western Hypocrisy

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Gordon Brown, the former British Prime Minister, has been raising a scare in the UK press about what he calls "the biggest environmental crime of our times" - the deforestation of Borneo, as reported by his sister-in-law, environmental activist Clare Rewcastle Brown.

Here's the interesting part - upon closer inspection, this controversy seems to be a classic example of a problem created by the West's policies toward combating global warming - and this controversy in particular is driven in part by Brown's own environmental policies as PM.

Continue reading "Biofuels and Western Hypocrisy" »

November 17, 2010

Countries at Risk from Water Stress

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The risk consulting firm Maplecroft has released an index measuring the countries most at risk from water stress:

The index is calculated by evaluating the ratio of a country’s total water use, from domestic, industrial and agricultural use, to the renewable supply of water from precipitation, streams, rivers and groundwater.

At a national level, the Water Stress Index identifies the Middle East and North African countries of Egypt (1), Kuwait (2), UAE (3), Libya (4) and Saudi Arabia (5) as exposed to the most overall risk. Water stress in this region is not surprising as it only receives 1% of the world’s precipitation, of which 85% is lost, for example through evaporation. However, the key economies of Australia (19), India (29), China (40) and USA (51) have all been rated as ‘high risk’ due to massive ‘extreme risk’ areas of water stress, where demand is exceeding 80% of total renewable water resources.

October 22, 2010

Arctic Melting, Arctic Rising

An interesting video highlights some of the changes occurring in the Arctic, though it mostly emphasizes the environmental changes and not the emerging geopolitical consequences from a warmer Arctic. Melting ice is opening the way for, potentially, new shipping routes and energy exploration. For my money, this piece by Laurence Smith is one of the most fascinating articles you'll read on the subject.

January 26, 2010

The Scott Heard 'Round the World?

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Over on Real Clear Politics, there has been plenty of speculation on the effect Scott Brown's election has had on domestic politics. However The Hindu reports that shock waves may be felt as far away as India. Both India and China are allegedly rethinking their decision to sign the Copenhagen Accord:

Prime Minister Manmohan Singh has written to UN Secretary General Ban Ki-moon seeking a number of clarifications on the implications of the accord that India -- with five other countries -- had negotiated in the last moments of the Copenhagen climate summit in December, the officials said, speaking on condition of anonymity.
“That letter, and the defeat of the Democrats in the Massachusetts bypoll, has forced the UN to postpone the deadline indefinitely,” an official said. “With the Democrats losing in one of their strongholds, the chances of the climate bill going through the US senate have receded dramatically.
“So if the US is not going to reduce its greenhouse gas emissions by 17 percent, which was a very weak target anyway, why should we make any commitment even if it does not have any legal teeth?” the official said.

I'm a treaty skeptic, especially of ones as difficult to enforce as carbon emissions. It seems highly probable that the Massachusetts Republican's victory is just an excuse for India and China to withdraw and blame it on a faction in the United States. Oddly, this could be a sign that China and India at least take these treaties seriously, since they are unwilling to sign if it would actually put them at a relative disadvantage to the United States.

(AP Photo)

January 19, 2010

Spying on the Arctic

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By Mia Bennett

The CIA is restarting a mission squashed during the Bush administration’s early days: sharing satellite imagery of the Arctic ice cap with climate researchers. From 1992 to 2001, scientists involved with the Medea program (Measurements of Earth Data for Environmental Analysis), spearheaded by former Vice President Al Gore, tried to see if any classified intelligence could be used for environmental analysis. Gore successfully convinced CIA head Robert Gates to begin the program. Now that Gates is back in a prominent political role as Secretary of Defense and Gore has successfully won Congress’ approval, the program is back in action. Still, the images have been slightly blurred to hide the actual capacities of the reconnaissance satellites. About 60 scientists have access to the imagery, and all have security clearances.

While there has been some opposition to using intelligence and defense resources for scientific and environmental purposes from the right, with Senator John Barrasso (R-Wyo.), saying that the CIA should be “combating terrorists, not spying on sea lions,” Medea seems to be an efficient use of government resources. (Note: sea lions are rarely spotted in the Arctic). Terrorists aren’t hiding in the melting ice cap, so the imagery itself isn’t necessarily sensitive. Satellites fly over the North Pole on a daily basis, so someone might as well look at the photos already being taken to see if they can be put to good use. And, if climate change is regarded as a national security threat, as the Pentagon and CIA are likely to do, the government might as well attempt to get the ball rolling with scientists understanding how global warming is affecting the Arctic. In fact, in October, the CIA set up the new Center for the Study of Climate Change, so the efforts of scientists and intelligence analysts seem to be dovetailing nicely.

Read more at the Foreign Policy Association's Arctic blog.

(AP Photo)

January 18, 2010

Oil & State Failure

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To continue with a theme from yesterday, the Center for American Progress' Rebecca Lefton and Daniel Weiss have issued a report, with the map above, showing American oil imports from "dangerous and unstable countries." The authors argue that American oil consumption helps to prop up unfriendly or even dangerous regimes and that it's time to invest that money on renewable sources at home.

Let's imagine that the authors get their wish and the U.S. finds a way to end its reliance on oil as a fuel (presumably we'd still need oil to lubricate machinery and as a feed stock for chemicals, but let's assume we can meet that need indigenously). What happens to the various "dangerous and unstable" countries once we deprive them of their major revenue source? Maybe they respond by adopting liberalizing reforms. Or maybe these nations join Yemen on the list of states teetering on the verge of collapse. And how secure would that make the U.S.?

I do think it would make more sense for the U.S. to invest its time, attention and resources in developing a less oil-intensive economy rather than trying to finesse the politics of the Middle East. At a minimum, such a development would help insulate our economy from major price swings and give us strategic resilience in the face oil-dependent powers. If such a move precipitates the collapse of various basket-case states, then that's a problem, but not necessarily an American problem. That's my view at least, but I was very much under the impression that the Center for American Progress believed that failed states represent a danger to the United States. I'm not clear why they'd want to produce more of them.

[Hat tip: Andrew Sullivan]

December 20, 2009

The Success of Copenhagen

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Two astute observers of international politics, Water Russell Mead and Leslie Gelb (leading the homepage today), draw the right conclusion: the Copenhagen summit was by in large a success and a harbinger of things to come. Here's Mead:

That’s our recipe for the future: split the difference between Europe and Asia in a way that works for us while opening the door to bad boys to come in from the cold — but otherwise freezing them out.

It reminds me of this:


If the U.S. proceeds along the course set by the Obama administration and defines leadership as the ability to bring other nations along its preferred path, then they should be prepared to define success down. "Solving" the world's problems, as Secretary Clinton suggested, is altogether a bridge too far. Instead, finding a globally acceptable, lowest-common-denominator outcome will be the order of the day (and even that won't be easy).

And there's nothing inherently wrong with that. By their very nature, the problems the administration has sought to address will be tackled collectively or they won't be tackled at all. On balance, it's better to have the wind of global opinion at your back, which Obama appears to enjoy for the moment.

But the administration should at least begin to put its (or rather, our) money where its multilateral mouth is. It's one thing to accept the fact that many global challenges will require the active assistance of other major powers to overcome. It's quite another to begin reconstituting America's global military posture and responsibilities to reflect that reality. If the Obama administration believes U.S. leadership in the 21st century means getting the cooperation of other nations, it should also make clear that America won't be left holding the bag (or the bill) if other nations don't step up to the plate.

It is very difficult to accept "half a loaf" but that's the nature of these things.

(AP Photos)

December 15, 2009

Polling Climate Change

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The more the world discusses climate change, it seems, the less Americans care. Here's Zogby:

As the United Nations climate change summit in Copenhagen heads into its final week, nearly half of Americans -- 49% -- say they are only slightly or not at all concerned about climate change, while 35% are somewhat or highly concerned, a new Zogby Interactive survey shows. Zogby's latest polling shows an increase in those who hold this view compared with 2007, when 39% said they were slightly or not at all concerned about climate change and 48% said they were somewhat or highly concerned.

Intensity of concern about global climate change has shifted over the past three years in favor of those who are not at all concerned - 27% held this view in 2007, compared to 37% who say the same now. Fewer now say they are highly concerned - 20% today compared to 30% in 2007.

I don't follow environmental issues close enough to speculate as to why this shift has occurred. Crisis fatigue?

(AP Photos)

December 10, 2009

Poll: U.S. Public Split on Global Warming Measures

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Rasmussen Reports has some new data:

Americans remain evenly divided over how urgent it is to deal with global warming.

A new Rasmussen Reports national telephone survey finds that 43% say we must take immediate action to stop it. But another 43% say we should wait a few years to see if global warming is real before making major changes. Fourteen percent (14%) aren’t sure which course to follow.

Looks like they have their work cut out for them at Copenhagen.

(AP Photos)

September 10, 2009

Carbon Tariffs: New Support for a Bad Policy?

By Scott Lincicome

The International Centre for Trade and Sustainable Development (ICTSD) reports today on some interesting news out of last month's high-level intergovernmental discussions on climate change in Bonn, Germany. From August 10th to 14th, government officials met to talk about key environmental issues in the run-up to December's negotiations in Copenhagen to forge a successor agreement to the Kyoto protocol. Overall, the multilateral talks were pretty typical - lots of talking, little clear agreement, and no concrete results.

However, there was one important development that warrants mention - an Indian proposal to agree that no developed country would unilaterally impose carbon tariffs or other "border adjustment measures" on imports from countries that don't have "sufficient" climate change measures. As ICTSD reports:

The discussions on the "economic and social consequences of response measures" to climate change saw heated debate on trade-related issues. The talks took a surprising turn when India proposed that the following language be inserted in the negotiating text:

“Developed country Parties shall not resort to any form of unilateral measures including countervailing border measures, against goods and services imported from developing countries on grounds of protection and stabilisation of the climate. Such measures would violate the principles and provisions of the Convention, including, in particular, those related to the principle of common but differentiated responsibilities (Article 3, paragraph 1), to trade and climate change (Article 3, paragraph 5), and to the relationship between mitigation actions of developing countries and the provision of financial resources and technology by developed country Parties (Article 4, paragraphs 3 and 7).”

The suggestion received support from dozens of developing countries but was opposed by the US, Japan, and the EU. Notably, the language referencing the UNFCCC agreement is clearly meant to cover Boarder Tax Adjustments - measures like the ‘carbon tariffs’ that are included the climate bill that is now working its way through the US Congress - even if such measures are WTO compatible.

As I've stated before, global opposition to carbon tariffs has grown in recent months to expand beyond the typical developing countries like China and India and include developed countries, such as Germany and Australia. The OECD Chief also recently spoke out against carbon tariffs, so the opposition of the US, EU and Japan to the Indian proposal at first blush appears to be a little surprising.

Well, it's not.

Developed country opposition to the Indian proposal does not mean that the countries necessarily support carbon tariffs. All it means is that they don't want their hands tied by the developing world in the multilateral negotiations. Developed countries want to be able to use the threat of carbon tariffs - or other unilateral measures - to get the developing world to commit to domestic climate change policies like carbon emissions caps. So committing to the Indian proposal would essentially ruin one of the developed countries' biggest and baddest negotiating tools. Hence, their unsurprising opposition.

That said, the Indian proposal is still important because it stresses just how much opposition there is in the developing world to carbon tariffs. "Dozens" of developing countries are very serious about this issue, and if the US Senate's climate change legislation mirrors the recently-passed House version ("Waxman-Markey") - as advocated by 10 Democratic Senators - the developing world is going to flip out. And the multilateral climate change negotiations in Copenhagen will collapse before they ever officially begin.

Something to think about when the Senate officially begins debating the climate change legislation. (Assuming, of course, that they stop pushing it off and finally do start debating it.)

So for now, we can't update the ol' carbon tariffs scorecard. It remains as follows:

Pro carbon tariffs - Ten protectionist Senators, the US House of Representatives (in Waxman-Markey), France, and Paul Krugman.

Anti carbon tariffs - the rest of the world.

But be forewarned, EU/Japan/US: I've got my eye on you.

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In 2008, Scott Lincicome served as a senior trade policy adviser for Senator John McCain’s Presidential campaign. He blogs at http://lincicome.blogspot.com/ where this post first appeared.

September 2, 2009

So Will it Be Cash or Carbon?

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According to a new UN report,

"It will cost between $500 billion and $600 billion every year for the next 10 years to allow developing nations to grow using renewable energy resources, instead of relying on dirty fuels that worsen global warming."

Ooph. The estimate is significantly higher than what anyone was expecting, and no country (perhaps excluding China) currently has the bucks to pay this type of tab. It's tough to imagine the U.S. or Europe selling this to their respective populations with job losses racking up month after month.

The solution? Richard Haass, Moises Naim, and Kemal Dervis seem to all be in relative agreement: at the climate change conference in Copenhagen in December, a treaty that places limits on carbon emissions for all countries is much less likely than an agreement between some major carbon emitters and some major powers to curb their own carbon emissions. A small something is better than nothing; I mean, that's a good place to start. Right or wrong?

(AP Photos)