Like what you've read?

On Line Opinion is the only Australian site where you get all sides of the story. We don't
charge, but we need your support. Here’s how you can help.

  • Advertise

    We have a monthly audience of 70,000 and advertising packages from $200 a month.

  • Volunteer

    We always need commissioning editors and sub-editors.

  • Contribute

    Got something to say? Submit an essay.


 The National Forum   Donate   Your Account   On Line Opinion   Forum   Blogs   Polling   About   
On Line Opinion logo ON LINE OPINION - Australia's e-journal of social and political debate

Subscribe!
Subscribe





On Line Opinion is a not-for-profit publication and relies on the generosity of its sponsors, editors and contributors. If you would like to help, contact us.
___________

Syndicate
RSS/XML


RSS 2.0

Can China change the Copenhagen consultations?

By Geoff Carmody - posted Monday, 30 March 2009


China, one of the largest economies, with greenhouse gas emissions to match, has made a positive contribution to the climate change policy debate.

This might transform chances of getting a global deal on climate change policy in Copenhagen in December 2009.

Gao Li, Director of China’s Department of Climate Change, says: “about 15 per cent to 25 per cent of China’s emissions come from the products which we make for the world. … This share of emissions should be taken by the consumers, not the producers.” Gao Li believes this is a “ … very important item to make a fair agreement”.

Advertisement

I think he’s right. Why should countries target production of emissions rather than consumption?

Some argue producers of emissions should be held responsible for them. Producer responsibility is well established in the environment policy area (“polluter pays”, etc). But in a world where countries don’t act in concert on emissions, this argument collapses because of national trade and jobs concerns.

First, it cannot work in a world where producers can relocate production to where it’s most cost-advantageous. A country’s pursuit of an emissions production base may even increase global emissions as production shifts to more emissions-intensive locations. Under the Australian Government’s policy, (the CPRS) industrial dislocation in Australia, with the (at best) transitional employment and income costs that go with it, will come with no gain in terms of global emissions - they could even increase.

Second, a production focus suggests wealthy countries (like Australia) can impose their national emissions reduction costs on other, much poorer, economies, by raising their export prices. It also pretends we won’t switch our own spending to emissions-intensive imports when these become cheaper compared with locally-produced substitutes now affected by higher carbon costs.

The assumptions that, under the CPRS, poorer countries won’t switch to cheaper sources of supply than countries like Australia, and (worse) that we won’t switch to cheaper imports (“contracting-out” emissions generation overseas), are hypocritical. By pursuing the current CPRS unilaterally, Australia is generating the incentive to do both. It’s shifting emissions overseas. It’s not reducing them.

If Australia won’t clean up its act - curtail its own consumption of emissions - what right has it got to tell others to reduce theirs? If we are to lead by example, we should address what we can control first: our emissions consumption.

Advertisement

These “moral” arguments have hard-edged economic benefits. A consumption focus could break the logjam preventing global adoption of a Kyoto-type climate policy.

If all countries focus on their emissions consumption, we still address global emissions. By definition, global emissions embedded in spending on (consumption of) goods and services are the same as emissions embedded in the production of those same goods and services.

But there’s a big difference between the consumption and production paths to a global deal on climate change policy. The consumption path covers local production sold locally plus imports. The production path covers local production sold locally plus exports. The consumption path avoids adverse trade competitiveness effects. The production path maximises these adverse effects.

  1. Pages:
  2. Page 1
  3. 2
  4. All

First published in The Age on March 20, 2009.



Discuss in our Forums

See what other readers are saying about this article!

Click here to read & post comments.

4 posts so far.

Share this:
reddit this reddit thisbookmark with del.icio.us Del.icio.usdigg thisseed newsvineSeed NewsvineStumbleUpon StumbleUponsubmit to propellerkwoff it

About the Author

Geoff Carmody is Director, Geoff Carmody & Associates, a former co-founder of Access Economics, and before that was a senior officer in the Commonwealth Treasury. He favours a national consumption-based climate policy, preferably using a carbon tax to put a price on carbon. He has prepared papers entitled Effective climate change policy: the seven Cs. Paper #1: Some design principles for evaluating greenhouse gas abatement policies. Paper #2: Implementing design principles for effective climate change policy. Paper #3: ETS or carbon tax?

Other articles by this Author

All articles by Geoff Carmody

Creative Commons LicenseThis work is licensed under a Creative Commons License.

Article Tools
Comment 4 comments
Print Printable version
Subscribe Subscribe
Email Email a friend
Advertisement

About Us Search Discuss Feedback Legals Privacy