Key Senators, Krugman Call For Tariffs On High-Carbon-Footprint Imports
By Mike Elk
September 23, 2009 - 3:07pm ET
Speaking Tuesday on a Campaign for America's Future conference call, Ohio Sen. Sherrod Brown said that the climate change legislation will not get 50 Senate votes if it does not place a tariff on imports that have unacceptably high carbon footprints.
For example, Chinese steel mills produce three times as much carbon emissions as American steel mills As a large body of research has pointed out, most of these savings come from weaker environmental standards and not labor costs, since labor accounts for less than 10 percent of the price savings.
U.S. steel companies spend around twice as much per ton of steel to control pollution than does the Chinese steel industry. Chinese industry is expending only about 3 percent of its capital expenditure budget on pollution control equipment, far less than the 17 percent the U.S. industry averaged for the last few years as it was improving its environmental controls. China and many other countries are able to make cheaper products because they cut corners on environmental costs.
The U.S. steel industry is the most sophisticated and efficient of steel producers, so advanced that when a group of bloggers toured a steel mill during Netroots Nation, we weren't allowed to take pictures out of fear that competitors could steal trade secrets from the photos. However, the American industry can't compete with nations like China and India who are allowed to cut costs dramatically by poisoning the air and the water at levels that are threatening to us all.
To enact strict emissions regulations domestically and not force other countries to do the same would be a tragedy for the American economy as industry would flee for these countries. For this reason, a group of 10 Democratic senators—including Brown, Robert Byrd of West Virginia, Russ Feingold of Wisconsin, Evan Bayh of Indiana and Al Franken of Minnesota—sent a letter to President Obama that said they would not vote for any legislation that does not include tariffs on products with unacceptably high carbon footprints. As the Senators argued in their letter
We must not engage in a self-defeating effort that displaces greenhouse gas emissions rather then reducing them and displaces U.S. jobs rather than bolstering them.
Indeed, if the U.S. adopts agreed-upon climate terms and other countries do not live up to their end of the bargain, we will see companies close factories in the U.S. and ship them to countries that allow unlimited harmful pollution.
As we have seen in the instances of the Chinese tire import issues, countries have again and again allowed big multinationals to violate their treaty obligations in the name of profits. By putting tariffs on products with unacceptably high carbon footprints, we can effectively combat global warming as many environmental organizations have advocated .
Even Paul Krugman, a typical defender of free trade, called for similar tariffs in a must-read piece entitled "the Empire of Carbon" . Krugman dismisses those that cry that a tax on carbon dioxide is protectionism by saying:
As the United States and other advanced countries finally move to confront climate change, they will also be morally empowered to confront those nations that refuse to act. Sooner than most people think, countries that refuse to limit their greenhouse gas emissions will face sanctions, probably in the form of taxes on their exports. They will complain bitterly that this is protectionism, but so what? Globalization doesn’t do much good if the globe itself becomes unlivable.
Furthermore, globalization doesn't do much good if the global economy becomes unsustainable. Manufacturing is the backbone of any economy. If you don't make something, you are forced to borrow until you can't borrow anymore. With credit markets frozen, the American economy has reached that point we can no longer borrow and are unable to buy the world's products on credit.
We have seen that unemployment and poverty have risen around the world as a direct result of the global economic imbalance. Leaders of the labor union federations from the 20 countries have called on their leaders to make the economy more sustainable in their "Pittsburgh Declaration." According to their report, unemployment is slated to double over the next 18 months in the industrial countries, and continue to rise with rates over 10 percent well into 2011. Additionally, over 200 million workers worldwide will be pushed back into extreme poverty.
Creating a system of global trade that is sustainable and allows all countries including the United States to flourish is necessary for a global economic recovery. To do this, we must enact strong laws that don't allow one country to cheat the other by polluting their way to low prices.
Some argue that such measures, such as putting a tariff on products with a high carbon footprint are protectionists and harmful. However, as Steelworkers President Leo Gerard argues today in a must-read New York Times piece defending the decision of his union to call for enforcement of trade laws on tire and paper imports:
“Anybody who believes we have a rule-based system, but we shouldn’t enforce the laws, they’re the ones jeopardizing the global trading system.”
Without a commitment to live up to—and a precedent of enforcing—agreements, any climate change treaty signed at Copenhagen or at future summits won't be worth the paper it is printed on.
In the wake of the China tire-import decision, we have heard a lot of rhetoric falsely labeling it as the beginning of a trade war. It is not. What is really happening is that workers around the world are engaged in an effort to protect themselves from the harmful effects of pollution and an unsustainable economy that hurts us all.
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Views expressed on this page are those of the authors and not necessarily those of Campaign for America's Future or Institute for America's Future