Wednesday, December 7, 2011

Climate Change Proposal

If a large number of countries wish to band together to limit climate change, could they impose a tariff on imports from countries that do not limit CO2 production, accusing the non-compliant of taking advantage of an unfair trade practice?

4 comments:

More Humean than Human said...

I'm no expert, but I suspect that the answer is mostly "no, because most are bound by treaties not to levy tariffs against the big states that would not agree." It's always worth while to suggest new policy angles, though.

mOOm said...

Yes, as long as Kyoto survives as it is an international treaty... EU and UK are already imposing taxes on air travel which effectively amount to tariffs.

ProGrowthLiberal said...

Not limiting CO2 - or not imposing that Pigouvian tax that Mankiw keeps recommeding - is akin to a subsidy. Which of course is indeed an unfair trade practice.

mike shupp said...

Almost a certainty, I think, especially as we move into the middle of the century. Countries will be making the point in trade talks that they are paying high costs to restrain CO2 production, etc. etc., and the US is not, even though it benefits from European (or Japanese, or Brazilian) practice. They're going to find our unwillingness to match their behavior as unfair and it's going to be reflected in the terms they offer.

Remember, as time goes by, China's going to be climbing in importance as a trade partner to many nations; the US will be falling. A time is going to come where nations tell themselves they can live without new trade agreeements with the U.S.