Essay by Eric Worrall
Climate subsidies like the Biden Inflation Reduction Act violated international free trade rules. The green solution: Get rid of free trade.
The US broke global trade rules to try to fix climate change – to finish the job, it has to fix the trade system
Published: September 5, 2023 10.31pm AEST
Noah Kaufman Research Scholar in Climate Economics, Columbia University
Chris Bataille Adjunct Research Fellow in Energy and Climate Policy, Columbia University
Gautam Jain Senior Research Scholar in Financing the Energy Transition, Columbia University
Sagatom Saha Research Scholar in Energy Policy, Columbia UniversityThe 2022 Inflation Reduction Act, President Joe Biden’s landmark climate law, is now expected to prompt a trillion dollars in government spending to fight climate change and trillions more in private investment. But the law and Biden’s broader “buy American” agenda include measures that discriminate against imports.
One year in, these policies, such as the law’s electric vehicle subsidies, appear to be succeeding at growing domestic clean energy industries – consider the US$100 billion in newly announced battery supply chain investments. But we believe the law also clearly violates international trade rules.
The problem is not the crime but the cover-up. Today’s trade rules are ill-suited for the climate crisis. However, simply tearing them down could hinder economic growth and climate progress alike.
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The Inflation Reduction Act contains a fundamental contradiction. Its promise to reduce global greenhouse gas emissions relies on the rapid diffusion of technologies, knowledge and finance across borders. Yet, its domestic subsidies may accelerate the adoption of trade barriers that inhibit these same cross-border flows, thus slowing progress on climate change.
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New rules could limit and define the appropriate use of green subsidies, carbon border tariffs, export and import controls and supply chain coordination. For example, the U.S. and other developed countries could agree to limit subsidies’ domestic sourcing requirements to only emerging, innovative clean technologies that require public support to commercialize. Building on this, all countries could work toward an explicit list of clean energy, transport and industrial technologies needed by all that can be traded with reduced or minimal tariffs.
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Read more: https://theconversation.com/the-us-broke-global-trade-rules-to-try-to-fix-climate-change-to-finish-the-job-it-has-to-fix-the-trade-system-212750
The academics claim they don’t want to get rid of free trade, but if they truly believe this is their position, the academics are kidding themselves. “Appropriate use of green subsidies” would be a trade protectionism enabling clause.
Any subsidy could be packaged as an energy efficiency development initiative. Any import tariff could be spun as a climate protection measure, to prevent the import of unacceptably energy intensive goods, or punish manufacturers or miners who were deemed to be too carbon intensive.
Sure such measures could be challenged – through expensive litigation, against government agencies backed by infinite legal resources, and no sense of urgency.
You can have free trade or you can have protectionism. You can’t have both, especially if you try to differentiate between which trade is free and which trade is protected with a test as nebulous as “appropriate use of green subsidies”.
If you doubt such vague clauses would be abused, consider that the very title of the “Inflation Reduction Act” is an absurd exercise in spin. Who nowadays believes the act had anything to do with inflation? The Biden regime’s laughable continued attempts to deny the act of giving massive subsidies to domestic businesses is a violation of international trade rules tells us all we need to know about how any future clauses which enable manipulation of trade rules would be abused.
And of course, let’s not forget how enormously profitable manipulation of such trade protection enabling rules would be for corrupt politicians. As P J O’Rourke once said, “When buying and selling are controlled by legislation, the first things to be bought and sold are legislators”.
Lucky the USA doesn’t have any corrupt politicians in Washington, right?
How much did Hunter Biden get from Chinese companies?
Depends on how much it costs to sell out your country
OT (I want to see a reporter ask Kamala Harris:
“It’s been a few years, so I am not sure, but I think it was your niece, a young woman of color, that was chastised for the utilizing your name as associated with a children’s book that she wrote. Do you find it a bit ironic that you, as vice president, and your niece were limited, and even restricted, in name use; whereas former vice-president Biden had his son & son’s business partners marketing/selling their business model through the brand of the vice-president ‘Biden’ name?
Have you talked to your niece about this … where do you think this kind of double standard comes from? If you are, in the future, eventually managing the presidential administration, would you create any similar disparate policies for your vice-president, or would you allow your vice president’s relatives to profit from the ‘name familiarity’?)
Nice question, but it is too long for Calamity Cackles Harris to grasp.
Now try to write Calamity Cackles Harris’ reply..
That would at least be entertaining, (include cackles where appropriate).
Cackely cackle cackle, uhmm, thank you for this opportunity to tell you about our new initiative to issue all preschoolers with our new hah hah carbon capture device cackle cackle. It is a plastic bag with pictures, cackle cackle, you know, gender-free make-up, hah-hah, so the child can put various styles over its face, to see which personality it likes best.
We have also created a special contact line, cackle cackle, so the public can report any deplorable Trump supporters trying to cut holes into our lovely face bags, hackle cackle hahha! They think they can make more air for our children!!! Cackle cackle..
If it isn’t broken, fix it until it is
What climate crisis is that, under a pillow, in the cabinet, wrong planet, or is it in the empty shells of warmist/alarmist heads?
The Marxists are introducing their ideology slowly, piecemeal, and in small enough increments as to not cause alarm. And those dictates are building up with most people not realizing what the consequences are.
Yes, and they are subordinating sound science, the U.S. Constitution and the law to Marxist and progressive ideology to do it. It is a dangerous thing to do, and we are already starting to see the suppression of dissent on social media (especially on X/Twitter before Elon Musk bought it).
That is why all the science that throws a large shadow of doubt and disconfirmation on the catastrophic climate alarmist narrative is ignored and suppressed. Orwellian thought-crime is not tolerated.
Lysenkoism:
https://en.wikipedia.org/wiki/Lysenkoism
Its a well known, though rarely spoken, fact that the EU routinely uses health codes and anti-pollution measures in exactly this way. It would not be a new thing were it to happen.
“Japanese Inspection” from the other side of the world was a ‘thing’ to discourage imports into Japan.
Columbia University. Nuff said.
Free trade? What free trade? What we have is managed trade under the WTO rules. What we have is a system designed and intended to serve the interests of the filthy rich of the Bilderberg Group and the World Economic Forum. These groups have not the slightest interest in what is actually in the interest of most people. They are there to serve the interests of the world’s billionaires only. That means NOT YOU! And serving their interests means exporting much of the world’s industrial capacity to the dictator Emperor Xi Jinping.
Absolutely correct cgh!
We have never had free trade with China.
I don’t even know how China could have possibly been added to the WTO – though the huge donation to vp Gore from Chinese sources might explain things.
“…and we shall control nations by stirring up their neighbours…should they all stand against us… we shall answer them with the guns of America, China or Japan”
Those words are over a hundred years old, do you see how capitalism was merely a ruse to confiscate all wealth on earth, and collect it under one account? China has always been part of that plan…ask Blackrock.
Capitalism is a pejorative created by Marxists to make is seem like it equates with socialism and communism.
The proper description is: Free Enterprise. Predators destroy Free Enterprise and call it capitalism.
There is/was free trade with China – Its called we steal, (free), you pay,(costs)..
China gets it technology free and the US pays for that steal..
Oh, I don’t know, the Rotschilds and Vanderbilts, was it, that had absolute carte blanche to drown China in opium for a long time…just like they are doing with America right now. Or do you suppose the trade in fentanyl is overly regulated?
Not sure about that one….the last so-called “free trade” agreement (but really managed trade as you say) for Canada-Mexico-US was an exercise in the US beggaring-thy-neighbor. Despite having full employment and highest income, US imposed 30% duties on forest products, aluminum, steel, airplanes, numerous manufactured products before ‘negotiating’ …then required protective duties for Canadian industries such as agriculture be dropped….Since hasn’t dropped the duties in many cases and continue collecting duties of more dollar value than the profit Canadian companies made. The result wiped out the Canadian airplane industry, once 4th largest in the world, was very hard on the auto industry, turned dairy farmers into paupers, closed lumber mills, and doomed Canada to constant per capita income decline by gutting any added value high tech manufacturing under threat of even higher duties. Canada has since dropped 6 places in world per Capita income. The Canadian federal government has done everything possible to hide the results of how seriously Canada was financially sacked, and basically paid the media huge bucks to never mention it in the hopes of better relations with the next US government….Biden’s….which did not materialize. For Canadians, the Bilderbergers aren’t much of a problem.
NAFTA was managed trade in the interests of the United States, not Canada. There wsa nothing free about it. These are the same interests today whihc have been reaping the rewards of destroying American industrial capability and shipping production to China. If you want an example, Apple do, along with the ludicrous pretentions of Bill Gates. Of course the Canadian government was in on it. It helped in their ongoing feud with the oil and gas industry in Alberta. And they could do essentially nothing in the US war against softwood lumber from Canada even thought that worked against the interests of every homebuilder in the United States.
The people who stagemanaged NAFTA are the same ones who helped organize the disaster called WTO. they are the same grinning gang of aristocrats who cheerfully fly private jets every year to UNFCCC and the annual Bilderberg conference.
As for this, “The Canadian federal government has done everything possible to hide the results of how seriously Canada was financially sacked, and basically paid the media huge bucks to never mention it in the hopes of better relations with the next US government”
Entirely true. The full corruption of the governing LIberal Party has not yet had its full effect. But it’s been confident enough in its political control to jail those who oppose its policies (crimimal trial of the leaders of the truckers protest).
But pretending that the Bildbergers aren’t a problem is seriously wrong. They are the same gang of thugs that brought us NAFTA. And the Liberals have taken over financially Canada’s formerly free press, turning it into nothing more than a propaganda mouthpiece for the Party. Hence, there is little to contradict their narrative and show how the country has had its economy ruined by Liberal malfeasance.
In that whole history, you cannot find one fingerprint of the Bilderbergers? Not one? The forests being burned down right now as an excuse to clear the land and force people into cities, no Bilderberg there? Turdeau destroying anyone who disagrees with him has absolutely no relation to the fact that he not only attends Bilderberg meetings, he hosts them?
The entire world has the Bilderbergers as a problem, and describing their sins while pretending it is merely circumstances around trade agreements, sounds like you are trying to minimise or even deny the Bilderbergers’ hand in creating and enforcing those trade agreements.
Bilderberg, Trilateral Commission, WEF, Rhodes Foundation, Rockefeller foundation… all heads of one snake, why pretend we were bitten by some silly rules, while the venom of Bolshevik misanthropy is coursing through society, killing and maiming our children in the womb and forever after?
Canada sure has many Bilderberg problems, and not all of them are called Justin Turdeau…
When in Dem. Party power politics mode, such constraints, deals, and media questioning go out the window. It’s LBJ mode now whether it works or not.
Anyone who thinks major countries of the world operate a system of ‘free trade’ hasn’t thought it through.
We would not not need repeated rounds of ‘Free Trade Negotiations’ if it was actually about free trade.
What we end up with is a collection of negotiated deals which enrich companies and elites at the expense of the majority, and generally advantage the powerful.
The guy who thinks it is free trade is the one who gets gypped.
Quite right, markx. What that is is managed trade to ensure that the monopolists will not be inconvenienced by any country that wants to defy them. This is how we end up with what are essentially criminal consortia running countries and institutions. Whatever the case, things like NAFTA, WTO, were not in the interests of the domestic taxpayer. They ony served the interests of the elite scum who are found at every international UNFCCC conference and WEA conference. annually. What their media lackeys call free trade is simply the management system to keep them in power and inflicting ever more destructive things upon us like carbon taxes.
And it’s been going on a long time. Remember who and what John Maynard Keynes was and in whose interest he was working.
“And of course, let’s not forget how enormously profitable manipulation of such trade protection enabling rules would be for corrupt politicians.”
Is that why Trump imposed billions of dollars of tariffs on Chinese goods? Or are tariffs only bad when imposed by democrats?
So Democrats who have taken money from Chinese firms are selfless saints?
The only tariffs you complain about are those that hurt your paymasters?
Those are direct punative tariffs in re: to Chinese dumping their products. The people whose jobs were saved/restored would certainly agree that the tariffs were good.
The trade rules buried deep in archane treaties just help the lobbyists that paid the politicians to put them there.
And it’s not going to help the environment making solar panels and wind turbines in China, that basically has no real environmental controls, doesn’t care about emissions and also doesn’t give a fig about labour and human rights.
So, even though I think turbines and panels are a waste of money (especially without affordable storage), if the government is going to subsidize anything it better be a make-work project at a bare minimum.
Agreed. The problem is that the punishment wasn’t hard enough, and it was promptly overturned by the useless and corrupt administration the US has now.
Duoh, PCman… They were “dumping their products”. The importing country always says that about export goods. It allows them to NOT invest in nor support business in their own country while making just as big of tax revenue in the form of duties as if the industry was at home…and all without having the hassle of collecting income taxes from their own population. The US is very big on hefty import duties to ‘support their own workers” even when those workers are fully employed…so just a grab of someone else’s potential wealth.
Yes, Trump said he got billions of dollars from the Chicoms using tariffs. He said previous presidents never even got ten cents from them.
I think Trump gave around $16 billion worth of those tariffs to American farmers to make up for the Chicoms shafting them. Trump says Iowa farmers are going to vote for him.
The Chicoms undercut one industry after another by underselling the competition until the competition goes out of business, and then the Chicoms get the monopoly.
I’m glad Trump interrupted this scam a little bit. I hope he does a lot more interrupting in the future. It’s in the national interests of the United States.
“Those are direct punative tariffs in re: to Chinese dumping their products. The people whose jobs were saved/restored would certainly agree that the tariffs were good.”
Yes, Trump saved U.S. steel production by preventing the Chicoms from dumping cheap steel on the market to undermine its competition.
The U.S. needs steel to produce weapons to defend ourselves. We would be fools to depend on our enemies to supply us with steel.
“Is that why Trump imposed billions of dollars of tariffs on Chinese goods? Or are tariffs only bad when imposed by democrats?”
So, Izaak, you support the Chinese being allowed to hollow out everyone else’s economy using slave labour and crooked currency manipulation, do you?
Actually – I took that sentence to mean that corrupt politicians would take a bribe to remove the tariffs, not impose them.
The only crisis is leftarded enemies of the human race infecting government, academia and industry.
The solution, for the United States, is to vote the radical Democrats out of office.
That means ALL Democrats. You may have what you consider a moderate Democrat representing you, if they vote to support the radical Democrats in Washington DC, then they are voting for tyranny, because that’s what the radical, Washington DC Democrats are all about right now.
Any support for Democrats is a threat to your personal freedoms. They will take them away like they are trying to take them away from Trump right now. And it won’t matter what political party you belong to, you better toe their line, or you are in big trouble. It’s not Republicans versus Democrats. It’s Elites versus Peons.
Don’t vote to be a peon of the radical Democrats. It only gets worse from here if you do.
As long as Democrat Party has 100% control of the voting system in America we cannot get rid of them.
Let’s hope they don’t have that much control.
People are paying attention this time around. I can’t say that will be enough, but it’s something.
The misnamed IRA is actually the “Inflation Induction Act”.
And inflation is a feature, not a bug: its just what a lot of progressive economists have been wanting [see P Krugman] as a way to pay down the national debt: we pay it off with less valuable dollars. But of course they ignore subsequent the immiseration of the citizens.
China went into huge debt but built roads, bridges & high-speed trains [plus a few unneeded cities]. However, we went into debt to pay our daily expenses [transfer payments] and to build nearly useless wind & solar farms [that produce relatively little energy, impair our electric grid, and anyway will need to be replaced very frequently]. Economic stupidity!
All based on unvalidated computer projections which are hyped into a “crisis” by which our ruling elites try to reorder our society into their version of utopia. This will not end well.
Mandates, subsidies and tax preferences are the problem not the solution. If there were no mandates, subsidies or tax preferences for wind, solar and EVs we wouldn’t be in the pickle we find ourselves in now.
Getting rid of free trade isn’t some unforeseen side effect. It’s the goal (or a part of it). Their goal is global authoritarian government where they have absolute power. Climate change is just one of the ways that they use fear based propaganda to get a large portion of the population to not only accept tyranny, but demand it.
You miss the point that the system really operates on trade deals, NOT ‘free trade’ deals.
If you doubt such vague clauses would be abused, consider that the very title of the “Inflation Reduction Act” is an absurd exercise in spin. Who nowadays believes the act had anything to do with inflation?
Ummm…you could try the ECB with their climate stress testing and how it will all be much cheaper in the long run-
Speeding up green transition would make it cheaper too – ECB (msn.com)
These folks are experts with big compooters and letters after their names.