Wednesday, November 3, 2021

g-f(2)625 THE BIG PICTURE OF THE DIGITAL AGE (11/3/2021), WSJ, Tariffs to Tackle Climate Change Gain Momentum. The Idea Could Reshape Industries.




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"g-f" fishing of golden knowledge (GK) of the fabulous treasure of the digital ageClimate Change, Tariffs (11/3/2021)  g-f(2)426 


Alert, WSJ


  • Governments in the U.S., Europe and other developed nations are embarking on a climate-change experiment: using tariffs on trade to cut carbon emissions. The idea has the potential to rewrite the rules of global commerce.
  • The proposals come with risks, including undermining world trade rules and triggering trade disputes.
  • “The WTO is considered by many as an institution that not only has no solutions to offer on environmental concerns, but is part of the problem,” Mr. Biden’s trade representative, Katherine Tai, said in an April speech.
  • “The WTO is only as decisive as its members,” said WTO spokesman Keith Rockwell, who stressed that the group can only make a decision with a consensus among its 164 members.
  • Policy makers on both sides of the Atlantic are looking at targeting steel, chemicals and cement. The tariffs would give a competitive advantage to manufacturers in countries where emissions are relatively low.
  • The risks of carbon tariffs are similar to those that come with regular trade barriers. A carbon tariff could push up production costs and prices, hurting businesses buying those products as well as consumers. They would hit the economies of developing countries that depend heavily on exports. And they could undermine world trade rules and trigger trade disputes. Some countries say the proposals are really protectionism in disguise.


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          The Cost to Reduce Global Warming? $131 Trillion Is One Answer | WSJ






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          Extra-condensed knowledge


          Lessons learned, WSJ


          • An estimated one-quarter of global greenhouse gases are produced by goods that cross borders, according to a 2018 report by economic and environmental consulting firms KGM & Associates Pty. Ltd. and Global Efficiency Intelligence LLC. In effect, the report said, the emissions that many developed countries claim to have eliminated were “outsourced to developing countries,” which generally have fewer resources to invest in cleaner and more advanced technology.
          • Economists and policy makers have been exploring the idea of carbon tariffs over the past 20 years, to level the playing field for domestic companies and to encourage trading partners to toughen their own emissions rules. When Yale University economist William Nordhaus accepted the Nobel Prize for his work on the economics of climate change in 2018, he proposed a global “climate club” of low-polluting countries that would impose a 3% tariff on imports from higher-polluting non-club members.


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          Lessons learned, WSJ


          • The European Union has taken the lead in carbon tariffs, unveiling its proposed plan in July. It currently has a cap-and-trade system in which domestic companies must obtain a permit to emit carbon, capped at a set amount. Permits currently change hands for around 60 euros, or $68, per metric ton of emissions.
          • Under its proposal, the EU would charge producers outside the area a fee similar to what domestic companies pay, based on the carbon content of their products sold in Europe.  The border adjustments would initially apply to four heavily polluting sectors: steel, aluminum, cement and fertilizer. European officials hope to implement the program by 2025 as part of a broader deal to cut continental emissions 55% by 2030.
          • British, Japanese and Canadian governments have begun exploring similar plans. In the U.S., more than a dozen bills have been introduced in Congress since 2015, by both Democrats and Republicans, that include some kind of carbon tariff, usually linked to a carbon tax on domestic products.
          • A carbon tariff could quickly shift advantages across borders, including by significantly altering the global steel trade, the Boston Consulting Group wrote in a report about the EU’s proposal last year. Chinese and Ukrainian steel made with high-polluting blast furnaces would lose market share to more efficient mills in Canada and South Korea, it said.
          • For nations, attempts to balance green pledges with a free-trade agenda haven’t had much success. The World Trade Organization has repeatedly declared illegal member environmental policies, such as subsidizing domestic renewable energy production, saying those improperly discriminate against foreign competitors.
          • The WTO tried and failed to create a global “environmental goods agreement” that would have cut tariffs and quotas on products designed to expand the world market for products helping reduce carbon emissions, such as wind turbines and solar panels. The talks collapsed in 2016 when China made a last-minute demand to include bicycles, and the Europeans refused.



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          • [genioux fact deduced or extracted from WSJ]
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          References


          “genioux facts”: The online programme on MASTERING “THE BIG PICTURE OF THE DIGITAL AGE”, g-f(2)625, Fernando Machuca, November 3, 2021, blog.geniouxfacts.comgeniouxfacts.comGenioux.com Corporation.


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