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  • How Will the Senate Address China and India?

    Cap and Trade Calamities

    One of the differences in the Senate version of cap and trade is that it leaves the door wide open on how to deal with countries that do not adopt carbon capping systems. China, India and other developing countries have made it clear they will not implement carbon cabs that would hurt their economies. The passed Waxman-Markey House cap and trade bill would impose a carbon tariff if countries do not implement some sort of carbon capping regime by 2020.

    Since cap and trade would artificially raise the price on goods produced in the United States and place American firms at a competitive disadvantage, imports suddenly become cheaper. Some members of Congress and Secretary of Energy Steven Chu suggests a carbon tariff would “level the playing field” and ensure that Americans don’t begin purchasing goods from other countries.

    But protectionism is not the answer. As if the economic perils of cap and trade weren’t bad enough, adding a tariff to carbon-intense imports will make them worse—not only for the United States, by making goods we buy from other countries more expensive—but also for developing countries relying on trade to better their own economies.

    A carbon tariff would severely hinder free trade. Protectionism often begets more protectionism. Countries already berating the U.S. cap-and-trade bill because they view this as unfair could very well respond by implementing tariffs of their own in retaliation. Zhang Haibin, a professor of environmental politics at Peking University and an adviser to China’s Ministry of Commerce on trade and climate change policies, warned the U.S. cap-and-trade bill “could spark big trade disputes, a trade war even.” Furthermore, trying to measure the carbon intensity of goods produced by different countries to create some sort of one-size-fits-all balancing act will be a bureaucratic nightmare and highly subjective.

    India and China’s carbon emissions are rising at rapid rates; in fact, China’s emissions are rising at rates six times faster than ours. The developing world is still developing. One Indian energy official recently said, “It is morally wrong for us to agree to reduce [carbon dioxide emissions] when 40 percent of Indians do not have access to electricity.” The path to a cleaner environment is not to prevent economic growth abroad but instead enhance it. As these countries develop and secure the fundamental needs for their citizens, they will be able to turn their attention to the environment. And we can help. Senior Trade Analyst Daniella Markheim of The Heritage Foundation suggests, “policymakers should maintain the integrity and freedom of global markets as a means to transfer clean technologies, keep international investment flowing, and promote economic growth and prosperity in the United States and around the world.”

    It will be interesting to see how the Senate deals with this situation. Stay tuned.

    Posted in Energy [slideshow_deploy]

    3 Responses to How Will the Senate Address China and India?

    1. Freedom of Speech, T says:

      Tariffs, Fees, Excise Taxes, Surcharges, Self-Employent Tax, Federal Income Tax, Sales Tax, VAT Tax, State Income Tax (for most states), County Taxes, City Taxes, Penalties, charges on cell phones, land lines, utility bills,…

      Countless BILLIONS are misspent, misallocated, lost to fraud and abuse, and stolen.

      There is so much money pouring in government coffers it dwarfs the rest of the world.

      Yet, we always need more and more and more.

      We have never realized that we cannot have EVERYTHING.

      Cap N' Trade will make it infinitely worse AND start some trade wars.

      You DEMS better get control of your radicals or they will drag ALL OF US down – including you.

    2. Bobbie Jay says:

      This is common sense, once again!!

    3. Charles Stinson says:

      This Global warming issue, we are jumping to conclusions. There is very little evidence to back it up. Wind mills, solar panels are not going to replace our use of carbon fuels. Considering the state of our economy and the unemployment problem we are facing, now is the time we should be pushing for drilling off our coast, build refineries, nuclear power plants to stop our dependance on foreign oil. It would certainly help correct our trade balance.

      Back when I was a youngster,all we read was about the ice age and how everything was going to freeze up. Most of our science agree that things work in cycles. Our problem is the EPA which has cost jobs and industry which this country badly needs. It is time these pinheads in Washington started using some common sense and what their wasteful policies are doing to this country and future generations. This is the worst administration I have seen in my life time. God help future generations until our dictator policies change.

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