Carbon tariff 'an excuse' to protect trade

By Ding Qingfen (China Daily)
Updated: 2009-07-04 08:29

Developed countries' proposals to impose "carbon tariffs" on imports will violate WTO rules and go against the spirit of the Kyoto Protocol, the Ministry of Commerce (MOFCOM) said on Friday.

A statement on the MOFCOM website said such a move would license developed countries to resort to "trade protectionism in the name of protecting the environment".

The MOFCOM statement comes amid debates and negotiations over what impact a new global pact to reduce greenhouse gas (GHG) emissions will have on the international balance of trade.

The US, Canada and the European Union (EU) have put forward proposals to "level the playing field" by raising import duties on countries not making the same effort.

The US Clean Energy and Security Act, passed by the lower house of Congress on June 26, empowers the government to take action against trading partners that fail to meet US emission standards and thereby gain competitive advantage - but not before 2025.

"If others don't impose a cost on carbon, then we (some manufacturers) will be at a disadvantage ... we would look at considering perhaps duties that would offset that cost," US Energy Secretary Steven Chu said. Carbon-intensive imports for the US include mechanical and electrical goods, steel, paper and aluminum-related products.

But, without mentioning the US move, the MOFCOM said: "This will not help strengthen the international community's confidence (and prompt it) to cooperate in tackling the (global economic) crisis. It will not help any country's endeavors at climate change negotiations, and China is strongly opposed to it."

Chinese officials and analysts said the US move was another kind of "trade protectionism".

"It's unfair," said Fu Donghui, managing director of Allbright Law Firm Beijing.

"I think they are using it as a means to pressure developing countries to cut more GHG emissions," said Zhang Haibin, Peking University's professor of environmental politics and an adviser to the MOFCOM on trade and climate change policies.

"But if the US takes unilateral action without proper multilateral consultations and agreements it could spark big trade disputes, or even a trade war," he said.

The MOFCOM statement did not mention the US or the new energy bill, known as the Waxman-Markey bill. But it did say any carbon tariff proposal runs against the spirit of the Kyoto Protocol, which categorically states that developed countries should bear the bulk of the responsibility when it comes to cutting GHG emissions.

The Kyoto Protocol, signed in 1997, says all developed countries must reduce emissions of six GHGs by 5.2 percent by 2010, taking 1990 as the base year. The US has less than 5 percent of the world's population but emits 25 percent of the world's total GHG.

The Kyoto Protocol ends in 2012, and countries are rushing to finalize a deal to succeed it at the UN climate conference in Copenhagen in December.

According to the roadmap agreed at UN climate talks in Bali in late 2007, there should be a "comparability of efforts" in the fight against global warming. "But it does not define comparability," said Zhongxiang Zhang, environmental scientist with the East-West Center in Hawaii.

"If you look at the roadmap, it talks about a comparability of efforts between the EU, the US and Japan, and not about China or India."

Zhang said some industrialized countries had extended the vague notion of "comparability" to developing nations, and threatened to use unilateral trade measures to avoid losing their competitiveness.

"With all these climate change negotiations going on, developing nations should ask the developed nations to define what is meant by 'comparability'," he said.