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A proposed climate change bill in the US ruffles feathers in China.
The draft climate change bill released by the U.S. House Energy and Commerce Committee March 31 is primarily focused on reducing domestic emissions of greenhouse gases. But its progress is bound to be carefully followed by at least one group of international observers.
The reason: U.S. Energy Secretary Steven Chu's comment last month that the U.S. should consider using tariffs against trading partners who don’t implement some sort of emissions reduction program.
“If other countries don’t impose a cost on carbon, then we would be at a disadvantage,” Chu told the House Science and Technology Committee. Import duties, he suggested, could be used to offset any such competitive advantages. “That will help level the playing field,” Chu said.
There was little doubt which country he was referring to. The next day, China’s top climate change negotiator, Xie Zhenhua, blasted Chu’s proposal. "I oppose using climate change as an excuse to practice protectionism on trade," he said.
The opposing views have put the world’s two largest emitters of greenhouse gases on a collision course.
At stake is the question of who should shoulder the cost of cutting emissions for goods produced overseas. In other words, if a product manufactured in China is sold in America, who’s responsible for its carbon footprint?
It’s not a trivial question. Half of the growth in Chinese emissions between 2002 and 2005 was due to export production, primarily for western markets, according to a report to be published in Geophysical Research Letters. In contrast, the country’s household consumption contributed to just 7 percent of the increase. By the end of 2005, exports accounted for one third of China’s greenhouse gas emissions, according to a researcher at Carnegie Mellon.
China’s climate negotiators would like the nations that consume its goods to pick up the cost of emissions — in effect paying the manufacturing giant to cut back its pollution.
The United States and other developed countries, for their part, are wary of implementing carbon reduction policies that would put their companies at a competitive disadvantage.
Energy-intensive industries — such as steel, chemical or paper — that have to pay for their carbon emissions would find their products priced out of the market. As they succumbed to overseas companies with no incentive to cut carbon, not only would the domestic economy suffer, the environment wouldn’t benefit.