Pragmatism Not Dogmatism: The Inconvenient Need for Border Adjustment Tariffs Based on What is Known About Climate Change, Trade, and China
39 Pages Posted: 24 Apr 2011 Last revised: 3 Apr 2012
Date Written: April 22, 2011
Abstract
The current paradigm for global trade is as antagonistic to low-carbon development as it is supportive of it. Considering the risks that climate change presents to human development, the global economy’s reliance on trade should be actively leveraged to promote low-carbon development. This is especially the case with China, where decisions made today about energy infrastructure investment will greatly influence GHG emissions for decades to come. The commonly promoted idea that all goods and all sectors should be treated equally under the global trade regime finds no practical support at the national level and even less support when the global externalities of certain sectors are critically analyzed, e.g., goods and services related to energy infrastructure.
In a less than perfect world, GHG based border tariffs are a pragmatic option for mitigating climate change. The promotion of border tariffs is far more pragmatic than the Panglossian belief that sans intervention the market will produce technological solutions that sufficiently address climate change. The continued dogmatic belief in an amoral free trade system for all sectors as the best option for addressing climate change will be far more harmful to the world’s poor and the global commons than well-managed border adjustment tariffs.
Keywords: trade (and) climate change, climate change (and) trade (and) tariffs, border tariffs (and) China, China (and) trade (and) climate, international carbon tax, economic theory (and) climate change, political economy (and) climate change
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