U.S. officials should oppose, not endorse, EU bully tactics

C. Boyden Gray, the U.S. Envoy to the European Union, said Tuesday (Jan. 28) that U.S. and EU adoption of carbon “offset” taxes (aka carbon tariffs) is “inevitable” if China, India, and other developing countries refuse to limit their greenhouse gas emissions.

Gray spoke to European-based reporters in a telephone news conference. As reported by Joe Kirwin of BNA (Bureau of National Affairs, Inc.), Gray said the United States and the EU would eventually “have no choice” but to impose carbon tariffs on products from developing countries to remain competitive in the global economy. To illustrate, he cited the import penalty provisions of S. 2191, the climate bill introduced by Sens. Joseph Lieberman (D-Conn.) and John Warner (R-Va.).

Such talk can only encourage European countries, which are considering a carbon tariff proposal put forward by the European Commission, to restrict trade and impede development in poor countries.

It is unclear whether Mr. Gray was speaking for the Bush Administration or just giving his own opinion. Only two weeks ago (January 17), U.S. Trade Representative Susan Schwab warned that “attempting to force others to act on climate change through trade saber-rattling carries enormous risks.” She characterized measures like Lieberman-Warner as “threats to the global trading system—a system that has delivered prosperity to billions around the world.”

According to BNA, Gray “also insisted that the United States now has binding greenhouse gas limits as a result of the energy bill (Pub. L. No. 110-140) passed by the U.S. Congress and signed into law by President Bush in December 2007.” Lots of luck selling that proposition to French President Nicholas Sarkozy! Those newly enacted fuel-economy and renewable-fuel mandates will not even come close to meeting the U.S. emission-reduction targets proposed in the Kyoto Protocol.

It’s an old story. Those who live in glass houses should not throw stones. The United States—for very good reasons—declined to ratify the Kyoto treaty. U.S. officials can’t go around calling for carbon tariffs on products from China and India without building a case for the EU and Japan to slap carbon penalties on U.S.-made goods.

Instead of threatening developing countries, U.S. officials should give them a wake up call. Policymakers in China, India, and other developing countries foolishly ratified Kyoto, thinking it was a free ride. They can no longer afford to indulge that pretense.

Kyoto was always a bait-and-switch ploy. Kyoto’s architects in the E.U., the U.N., and the Clinton Administration enticed developing countries to ratify the treaty with promises of foreign aid and an exemption from mandatory emission limits.

However, two things have become painfully obvious.

First, Kyoto cannot actually reduce global emissions—much less stabilize atmospheric CO2 levels—unless China, India, and other key developing countries also limit their emissions. Second, the developing country exemption creates strong incentives for energy-intensive industry, jobs, and carbon emissions to migrate from carbon-constrained countries to China, India, and other emerging industrial powerhouses.

Bottom line: The developing country exemption cannot survive, if Kyoto is to endure.

This is no longer a matter of logical inference but brute political fact. The treaty only entered into force in 2005, and the first (2008-2012) compliance period has barely begun. Yet already, President Sarkozy, the European Commission, and Sens. Lieberman and Warner are effectively calling for repeal of the developing country exemption. Bait and switch!

Bush administration officials should oppose, not endorse, such bully tactics. America, after all, is itself a developing country, albeit the world’s most successful.

When we defend China and India’s access to affordable energy, we also defend our own. By the same token, if we attack their right to develop, we will also undermine ours.