Saturday, July 26, 2008

It's their economy, stupid...

An unimpressed parsing of Western carbon curbs, by Pramit Pal Chaudhuri in the Hindustan Times (India): Climate change is getting nasty. And we’re not talking about the weather. The climate change policies rolled out by the European Union in the past few weeks make it clear Brussels will use trade sanctions to push these policies overseas. Legislation tabled before the US Senate indicates the next Washington administration will go down the same slippery slope.

Wrongly or rightly, carbon emission curbs have become the kernel of the West’s anti-climate change policies. The only existing multilateral carbon curbs are those enshrined in the Kyoto Protocol. …

Brussels’ decision to put the carbon tariff threat on the table is a “shot across the bow”, but something like this is “inevitable”, say those familiar with the EU’s official thinking. The idea is to scare countries like India and China into signing up for carbon curbs of the Kyoto variety and comparable to the commitments made by the EU. In India’s view, this is morally and economically questionable. There is a huge economic gulf between the two sets of countries. Eighty million Germans and 60 million Italians together generate as much carbon as 1.1 billion Indians. There is the additional problem that emerging economies are still undergoing an energy-intensive industrialisation process that is largely history for the West.

….It is obvious China, with the world’s most dynamic manufacturing base, will suffer the most from carbon tariffs. However, India cannot afford to be sanguine. India is one of the ten largest exporters of steel to the US and a major exporter of chemicals to the developed world. Much of Indian industry is powered by dirty coal and would face proportionately high tariffs.

It is important to realise the threat Kyoto represents for India’s economic rise. India is experiencing a revival of the factory base ruined by a half-century of socialism. This assembly-line renaissance — and the essential role it plays in absorbing surplus rural labour — will be stillborn if new factories are unable to export or have to pay for green technologies sold at gunpoint. Putting together an alternative carbon emissions policy, one that is far more nuanced than the guillotine of Kyoto, and stitching up a diplomatic alliance of like-minded countries is now an imperative for New Delhi. The carbon trade wars are coming.

The recently completed Delhi metro, shot by Ankur, Wikimedia Commons, under the terms of the GNU Free Documentation license, Version 1.2

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