From the Potsdam Institute for Climate Impact Research (PIK)
Constraining world trade is unlikely to help the climate
Instead, researchers were able to pin down a number of factors explaining the pronounced imbalances between emission importers and exporters, the US current account deficit being one of them. Their conclusion: interventions in world trade, like CO2 tariffs, would probably have only a small impact on global emissions.
Steadily growing world trade leads – as earlier research has shown – to a substantial transfer of CO2 from one country to another. The traded goods effectively contain the greenhouse gas, as it originates from the energy used during their production. “Typically, in the West we import goods whose production causes a lot of greenhouse gas emissions in poorer countries – and it is a contested question to which countries these emissions should be attributed,” explains Michael Jakob from the Potsdam Institute for Climate Impact Research (PIK), one of the authors. This is a delicate issue, because many Western countries have ambitious targets for emissions reductions. Simply transferring emission-intensive industries to third countries in order to achieve these goals would not serve climate protection – and might even damage the economy.
Almost half of the CO2 transfers into the US are caused by the American trade deficit
“For the first time, we have now broken down the known emission transfers into their components,” Jakob says. The economic analysis is based on an evaluation of estimates that were determined by other researchers in earlier studies. “We can show that of the CO2 flowing into the US in form of imported goods, almost 50 per cent are due to the American trade deficit alone,” Jakob explains. The US emits less CO2 in the production of its exports than is contained in its imports, simply because it imports more than it exports. “And only about 20 per cent of CO2 transfers from China into the US can be traced back to the fact that China is in effect relatively more specialized in the production of dirty goods,” Jakob says. But this is the only driver of emission transfers on which the currently controversially discussed climate tariffs could take effect.
Without world trade, the emission of greenhouse gases in countries like China could potentially be even higher than today, according to the study. Western countries often export goods like machines that need a lot of energy in the production process. Usually, this energy stems from comparatively clean production processes. On the other hand, China produces a lot of export goods like toys, whose production needs relatively little energy, but stems from emission-intensive coal power plants. If China with its fossil energy mix had to produce more energy-intensive goods itself instead of importing them, emissions would increase. “In the end, interventions in world trade could do more harm than good,” says co-author Robert Marschinski from PIK and Technische Universität Berlin.
“The crucial question is how clean or how dirty national energy production is in each case”
“Crucial for CO2 transfers is not only world trade, but also the question of how clean or dirty national energy production is in each case,” Marschinski emphasizes. To look only at CO2 transfers could be misleading. If for instance the European Union were to adopt new low emission production methods, its net imports of CO2 could increase even though there is no relocation of production.
“To really justify trade-policy interventions like the much discussed CO2 tariffs, further analysis would be needed – the observed CO2 transfers alone are not enough as a basis,” Marschinski explains. “Such measures cannot replace what it really takes: more international cooperation.” Binding global climate targets could give incentives for investors to promote low-emission technologies. Innovations in efficiency could get financial support, and regional emission trading systems could be linked with each other, Marschinski says. “All this could help to achieve climate protection targets in an economically reasonable way.”
Article: Jakob, M., Marschinski, R. (2012): Interpreting trade-related CO2 emission transfers. Nature Climate Change [DOI: 10.1038/nclimate1630] (Advance Online Publication)
Weblink to the article when it is published on September 23rd: http://dx.doi.org/10.1038/nclimate1630
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polistra says:
September 24, 2012 at 2:09 am
“It’s blazingly clear that trade limitations WILL result in less pollution of all kinds, especially the real kind. Trade limitations will also have more important benefits, such as restoring the productive economies of Western countries and giving decent jobs to ordinary people in Western countries. This is so f*ing obvious that it’s unspeakable and unthinkable. Nobody on either political “side” dares to venture into the territory of “protectionism” because it would actually help people, and nobody in politics wants to help people.”
Hmm… it’s a little more complicated. You want a job, but you surely also want that iPhone, right? Now, here’s a suggestion. You work for Chinese wages. How about that? Oh, violates the minimum wage requirements, I see… Other suggestion: An American made iPhone will cost 5,000 bucks. Hmm… nobody will buy it…
Help me out there. What do you prefer – less Dollars for your work or less product for your Dollars?
As usual, studies like this examine here and now conditions, not the China of the future, which is planning upwards of 600 nuclear plants by 2030 and 1800 by the end of the century. Buying Chinese goods enables these plants to be built, and they will enable China to surpass the Western nations in terms of low emissions and affordable electricity, making their country even more competitive. China now has the capability of constructing gen 3 nuclear power plants without any help from the “advanced” Western countries, as does India.
EU AIRLINE CARBON LAW VETOED BY U.S.
Following China’s lead, which had threatened a trade war with the EU over their airlines’ “carbon emissions,” the U.S. Senate unanimously passed a bill over the weekend that would shield US airlines from paying for their carbon emissions on European flights, pressuring the European Union to back down from applying its emissions law to foreign carriers. The European Commission has been enforcing its law since January to make all airlines take part in its Emissions Trading Scheme to combat global warming, prompting threats of a trade fight.
The Senate approved the bill shortly after midnight on Saturday, as it scrambled to complete business to recess ahead of the 6 November congressional and presidential elections. Republican senator John Thune, a sponsor of the measure, said it sent a “strong message” to the EU that it cannot impose taxes on the United States; “The Senate’s action today will help ensure that US air carriers and passengers will not be paying down European debt through this illegal tax and can instead be investing in creating jobs and stimulating our own economy,” Thune said.
The House of Representatives has passed a similar measure, and could either work out differences with the Senate’s version or accept the Senate bill when Congress returns for a post-election session.
The EU’s tax seems doomed if the EU airlines now protest that they are being unfairly taxed. Under WTO fair trade rules, either all the airlines must pay or none of them.
Western countries often export goods like machines that need a lot of energy in the production process. Usually, this energy stems from comparatively clean production processes. On the other hand, China produces a lot of export goods like toys, whose production needs relatively little energy, but stems from emission-intensive coal power plants.
Real machines like lathes and mills and nearly all production equipment use bases (that which the moving parts are mounted to) of cast iron or steel, which are cast then machined. Given the humongous amount of machinery imported from China and Taiwan, with real 100% Made in USA virtually nonexistent, I doubt America has retained much casting ability for anything larger than an 18-wheeler’s engine block.
So we farm out the dirtiest most carbon-intensive work to China and nearby. Often we import complete machines, just try getting a manual mill or lathe or surface grinder that isn’t an import without paying at least 4 times more for new “American made”. You’ll get reamed from buying used American instead of new import, anything being sold needs rebuilding.
But it seems a given that even “American” machinery will use a base that was at least a casting from China or thereabouts, even if we machine it here, that we then assemble the final machine on and around. Plus whatever other cast parts are used.
And these geniuses have determined we export machines made usually with “clean” Western-style energy? Did they only look at the machines, and not at all the steps and parts involved and where they came from?
Always finding something to worry about. Who really cares where the CO2 comes from? Does it really make any difference? So many important things to worry about, especially now. Can’t these people find a way to be productive in society? We need economic growth. Let’s all agree to worry about CO2 later, after the economy is back on track.
Let’s not forget the source of the article. I think the reason for this article is not found in the headline “Constraining world trade is unlikely to help the climate.”
The reason for the article is found is last paragraph of the press release. “Marschinski explains. ‘Such measures cannot replace what it really takes: more international cooperation.’ Binding global climate targets could give incentives for investors to promote low-emission technologies.”
The paper is really an argument for “binding global climate targets”
Constraining trade only has one consistent and reliable effect – that of constraining trade. The chief inconsistent and unreliable effect is that of adding friction to the economy. Depending on which sectors of the economy have been constrined, various other sectors will be slowed or stalled.
The effect is like that of trying to steer a ship at full steam by lowering anchors over the sides, rather than letting the engines run and using the rudder. The trouble is, most of the politicians playing these games are seeking self-gratification and an illusion of control over the economy, but they have no clue what that big wheel on the poopdeck is for.
kadaka (KD Knoebel) says:
September 24, 2012 at 6:17 am
“So we farm out the dirtiest most carbon-intensive work to China and nearby.”
kadaka, a year or two ago SGL carbon has started building a factory for carbon fibres in Washington. It’s about the most energy intensive product you can produce, and they went there because of the abundance of cheap hydropower.
“Typically, in the West we import goods whose production causes a lot of greenhouse gas emissions in poorer countries – and it is a contested question to which countries these emissions should be attributed”.
——————————————
So it’s not the fault of China and India that their CO2 levels are increasing – they are passive, innocent recipients of CO2 being forced upon them by the wicked industrialised West.
Steve R says:
September 24, 2012 at 6:55 am
“Can’t these people find a way to be productive in society? ”
There is no evidence for that. Rahmstorff’s wife tried to sell silver jewelry with the number of a carbon credit imprinted; and some other guys from PIK tried to sell a climate change related board game. Both enterprises failed.
The Null hypothesis therefore stands: PIK people cannot find productive activities in society.
“Typically, in the West we import goods whose production causes a lot of greenhouse gas emissions in poorer countries – and it is a contested question to which countries these emissions should be attributed,”
Does this mean the UK is in credit as it was an exporter for well over 100 years
Gosh, Guys! Don’t you understand — CAGW is going to destroy everything we hold dear! Gee, if only we had a really big dose of destitution, poverty and starvation to help save our life style!
(Do I really need to put a “sarc” tag on that?)
German energy intensive industries are already considering leaving Germany because of the lack of grid stability and cost of electrical energy following all the billions wasted on “green” energy.
I imagine German workers will be very happy to realize when their jobs are lost to the third world that it didn’t even reduce CO2 emissions (as if that was a good thing).
An old book set in Italy noted that “they were a nation of crooks ruled by scoundrels.” I have come to believe that all Western nations are made up of fools ruled by idiots.
From DirkH on September 24, 2012 at 10:29 am:
http://green.autoblog.com/2011/09/09/bmw-sgl-open-state-of-the-art-carbon-fiber-facility-in-washingt/
IF plug-in electrics with lightweight carbon fiber construction are indeed the wave of the future, and specifically the BMW versions, then the plant will succeed.
Given the popularity of plug-in electrics, outside of the CO₂-phobic EU and certain small enclaves of Southern California, I do not expect the expectations to be met.
Thus I suspect the US choice was related more to tax laws and economic incentives. If a plant fails in China, it’s dead. It’d be too prohibitive to even start one in Europe. Here in the US we’re rewarding failure, as long as it’s a Green failure. A carbon fiber plant dedicated specifically for plug-in electrics, that should qualify.
Plus those reels of carbon fiber are the low-value end. Why don’t they make those passenger cells in the US as well, and ship that higher-value product to Germany as needed, or even complete cars? Why does it make more sense to send US fiber to Germany, then ship it back to the US as higher-value products? Isn’t BMW expecting a large US market for their “wave of the future” lightweight plug-ins?
Wouldn’t it have been easier for them to just look at the coal train loadings headed for Pacific ports destined to China, and the cargo containers of goods returning? This isn’t exactly a secret.
Heck, Warren Buffet, via BRKA Birkshire Hathaway bought out BNS Burlington Northern Santa Fe railroad to cash in on the “Coal to China” lever being pulled by all the ’emissions reduction’ folks.
Similar gains in Australian Coal to China shipments. At least until the last couple of years when we ran out of money to send along with the coal….
Next thing you know, they will discover that Maurice Strong and others are making money off of the shipping of Jobs to China too… Almost like it was planned that way…