Trade sanctions against the US?

Spam email is the bane of my life. At one time a few years ago  I was  naive enough to leave my real CDU email address when commenting on blogs.    Of course, it  was harvested by the spammers and the number of spam emails  I get in my work inbox has been spiralling upwards ever since.   I get an average of 60 every day.   Fortunately CDU has belatedly invested in technology that not only tags potential spam (they’ve had that for a while) but  which also consigns it automatically to the email waste bin.

However, there are occasional spam emails that I actually quite like receiving (although it’s still extremely rude to send them uninvited).   One is a circular for an economics journal called The Economists’ Voice, a publication apparently associated with Joseph Stiglitz and American blogger/economist Brad Delong.   Their latest spam carries a link to an interesting article by Stiglitz titled A New Agenda for Global Warming.   Here’s an extract:

At first, President Bush denied the existence of global warming; when his own National Academy confirmed what every other scientific body had said, he promised to do something¢â¬âbut did little. Some American politicians whine that emissions reduction will compromise America’s living standards; but America’s emissions per dollar of GDP are twice that of Japan. America not only can afford to conserve more, it actually would enhance its energy security by doing so. It would be good for its environment and for its economy¢â¬âthough not, perhaps, for the oil companies that have prospered so well under the current Administration.

Fortunately, we have an international trade framework that can be used to force states that inflict harm on others to behave in a better fashion. Except in certain limited situations (like agriculture), the WTO does not allow subsidies¢â¬âobviously, if some country subsidizes its firms, the playing field is not level. A subsidy means that a firm does not pay the full costs of production. Not paying the cost of damage to the environment is a subsidy, just as not paying the full costs of workers would be. In most of the developed countries of the world today, firms are paying the cost of pollution to the global environment, in the form of taxes imposed on coal, oil, and gas. But American firms are being subsidized¢â¬âand massively so.

There is a simple remedy: other countries should prohibit the importation of American goods produced using energy intensive technologies, or, at the very least, impose a high tax on them, to offset the subsidy that those goods currently are receiving. Actually, the United States itself has recognized this principle. It prohibited the importation of Thai shrimp that had been caught in “turtle unfriendly” nets, nets that caused unnecessary deaths of large numbers of these endangered species. Though the manner in which the United States had imposed the restriction was criticized, the WTO sustained the important principle that global environmental concerns trump narrow commercial interests, as well they should. But if one can justify restricting importation of shrimp in order to protect turtles, certainly one can justify restricting importation of goods produced by technologies that unnecessarily pollute our atmosphere, in order to protect the precious global atmosphere upon which we all depend for our very well-being.

Japan, Europe, and the other signatories of Kyoto should immediately bring a WTO case charging unfair subsidization. Of course, the Bush Administration and the oil companies to which it is beholden will be upset. They may even suggest that this is the beginning of a global trade war. It is not. It is simply pointing out the obvious: American firms have long had an unfair trade advantage because of their cheap energy, but while they get the benefit, the world is paying the price through global warming. …

To tackle the greenhouse emissions of the rest of the world (especially the third world), Stiglitz advocates a global emissions tax at an agreed flat rate, applying to all countries.   One would suspect that there’s Buckey’s Chance of achieving international agreement on any such proposal in the  short term future, but it’s an interesting idea just the same.  

About Ken Parish

Ken Parish is a legal academic, with research areas in public law (constitutional and administrative law), civil procedure and teaching & learning theory and practice. He has been a legal academic for almost 20 years. Before that he ran a legal practice in Darwin for 15 years and was a Member of the NT Legislative Assembly for almost 4 years in the early 1990s.
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15 years ago

unless the games of world trade/institutions are changed, the free-riding incentive (both to not abating AND to not punishing) of nation states without an actual authority over and above the state prohibits any stable global agreement forming with high abatement costs, as in the case of carbon.

montreal worked because it was cheap.

15 years ago

Happily, given that Buckley actually made it, there isn’t even Buckley’s…