The Hidden Costs of Exporting CO2 Emissions
Introduction
As the world grapples with the urgent need to combat climate change, discussions surrounding CO2 emissions and their impact on the global economy has taken centre stage. One contentious issue that has emerged is the concept of CO2 import tariffs. Such tariffs would aim to address the soaring demand of exporting carbon emissions to countries like China and India while seemingly reducing emissions domestically. However, I will proceed to argue that this approach harms the British economy and businesses alike, creating an illusion of progression in a desperate ploy for Western nations to ‘feed their image‘ on the global stage, this issue has also exacerbated the case to accelerate the implementation of CO2 import tariffs – levelling the playing field for sustainable, British industrial goods.
The Mirage of Reduced Emissions
The introduction of CO2 import tariffs, scheduled for 2026, is undoubtedly a step in the right direction, however, there is a growing consensus that these tariffs should be implemented sooner rather than later, with more stringent fees. The primary reason for this urgency is the alarming trend of British businesses struggling to compete with offshore prices, due to their minimal to no CO2 regulations in countries like China and India.
Statistics will tell the same story: Over the past decade, European nations have made significant strides in reducing their CO2 emissions. For instance, the European Union’s emissions fell by 24% between 1990 and 2019. However, as a result of these reductions, imports from Asian nations, particularly China, have surged. In 2019, the UK alone imported goods worth £49.5 billion from China, a significant portion of which was produced in industries with higher CO2 emissions. This shift in emissions from the West to the East raises critical questions about the effectiveness of domestic emission reduction efforts.
Yes, it is obvious Western nations have made a conscious effort to drastically manage C02 emissions, however it cannot be denied that this effort has a little to no effect on global emission rates. Since 2005 for the US and 1990 for Europe, CO2 emissions have operated at a downward tangent, however at the same time both China and India have increased their emissions year on year – with no reduction.
Levelling the Playing Field
The argument in favour of accelerating CO2 import tariffs rests on the premise of creating a level playing field for sustainable goods. British companies that have had to adhere to stringent environmental regulations have faced a significant competitive disadvantage when competing against products manufactured in countries with laxed emission expectations. This not only harms domestic businesses, but also undermines the goals of reducing global emissions, thus the only identifiable solution would be to either reduce our own emission regulations, or introduce a boarder tariff, pinpointed at nations with subnormal CO2 rates.
Through imposing these higher import tariffs on goods produced in extreme CO2-emitting countries, the UK can incentivize foreign manufacturers to adopt cleaner manufacturing practices, actively reducing global emission rates – rather than feeding our emissions elsewhere. Such tariffs would reflect the true environmental cost of the imported goods, reducing the price advantage enjoyed by high-emission industries abroad. This, in turn, would encourage British consumers to choose more sustainable options, fostering a transition towards cleaner and greener products. But that isn’t the only benefit! As a result, one would expect us to become more self-sufficient, and as a nation be less reliant overseas and more focused on our own industrial goods.
Addressing Arguments Against CO2 Import Tariffs
Some argue that Western nations have enjoyed an unfair advantage for centuries and that it is now their responsibility to bear the economic costs of climate change. While historical inequalities can indeed be argued, I would contend that any attempts to do so would be in vain, combined with a lack of understanding that if tomorrow we relaxed all of our climate regulations (which is a lot), then our economic situation would soar higher – deceitfully so – than fellow European nations.
Picture a scenario where the UK could potentially usher in a wave of economic benefits – via little to no climate regulations. Industries seeking lower production costs might see the UK as a more attractive destination, enhancing our global competitiveness. Sectors with high energy consumption, like manufacturing and heavy industry, would find it financially advantageous to operate in a less regulated environment, resulting in greater job creation. Does that sound familiar? Because this is precisely how China and co have operated over the last 20 years, summarizing why their economy has taken such a colossal leap.
Arguing that because of historical inequalities we should just expect Western nations to continue to lose business and incur high costs for the sake of climate change, and only to see reduced emissions move elsewhere, simply ignores the interconnectedness of our global economy. The environmental damage caused by unchecked emissions in one part of the world ultimately affects us all. By exporting emissions to countries with fewer regulations, we are merely shifting the problem, not solving it. If global emissions continue to rise, while our own emissions head towards net zero, it begs the question: what is the point in all of this? Why persist in regulating our businesses to the brink of collapse, relinquishing our capacity to sustain our domestic market, and fostering an import-dependent culture, all while our endeavours seem to yield no significant results?
Conclusion
To conclude, it is undeniable that CO2 import tariffs represent a crucial tool in addressing the harmful practice of exporting emissions to countries with non-existent regulations. While there is a similar scheme set to be introduced in 2026, there is a compelling case for their acceleration and strengthening of this. The fact of the matter is that European nations’ reduction in CO2 emissions has only led to a surge in imports from high-emitting countries, highlighting the need for immediate action and showcasing to other nations that the only way to grow their economy is to mass produce (with high CO2 costs) for the sake of us Western nations to ‘look good on the global stage’.
These tariffs are not about punishing other nations, but rather about creating a level playing field for sustainable and British goods. They will encourage cleaner production practices globally and drive the transition to a more sustainable and equitable global economy.
The UK’s Place in the World: Strategic Industries, China, and Sovereignty
This article was originally published on 17th November 2021.
The Brexit-leading Conservative government wants to back up the talk of the referendum campaign. Now that the UK has Brexited there’s a practical need to set a plan of action and follow it. A lot of intellectual work was taken care of by just following whatever the EU position was.
Global Britain, sovereignty, trade deals, etc., OK. What’s the plan? Some of that’s answered implicitly. Elizabeth Truss as Secretary of State for International Trade was busy doing trade deals. AUKUS speaks to diplomatic, defence, and geographical focus. COP26 – the UK is supposed to make its name on climate stuff. OK.
This is what the Prime Minister says the plan is. Some key points: greater engagement in the world, securing the UK’s status as a “Science and Tech Superpower by 2030,” and a “tilt to the Indo-Pacific.” This is still getting ahead of itself.
A recent announcement about an old deal, about an investigation into the Nvidia takeover of Arm (originally a British microchip design company, taken over by the Japanese SoftBank) is a good enough starting point for something to think about.
The Cameron and May governments were very permissive of a lot of foreign investments and takeovers e.g. Chinese nuclear power projects, Huawei and 5G, invitation into the Northern Powerhouse. A lot of people are still angry at the sale of state assets under Right to Buy to British people. Why does the sale of much, much larger British companies/assets to foreign interests provoke almost nothing? What about foreign ownership in the housing market, for that matter?
At least the Johnson government has revisited some of these blunders. It also hasn’t put a complete stop to a lot else which contradicts its strategic review. For example, the Chinese takeover of British Steel, the Chinese takeover of the UK’s largest microchip producer, and the Chinese takeover of a major UK graphene producer. Sort yourselves out!
Strategic Industries and China
Start with making a proper assessment of the UK’s assets. What are you working with?
The Johnson government is promising to do a lot of things differently to the Cameron and May governments. When William the Conqueror took over as CEO, he did an inventory check, right down to the kinds of cheese in England.
Napoleon was notoriously obsessed with information.
In the autumn of 1811, the peak of Napoleon’s empire (has France been as well-governed since?) the emperor visited 40 cities in 22 days. This is despite losing three and a half days of travel to gales and floods. He would prevent mayors from giving great speeches and instead ask them questions. Population, death, revenues, forestry, tolls, municipal rates, conscription, civil and criminal lawsuits. Even about how many sentences passed by mayors were annulled by the Court of Cassation, and whether mayors had found means to provide suitable lodgings for rectors.
Would Mayor Johnson have fared well under Napoleon’s questioning? Prime Minister Johnson? Sure, why not? The information Napoleon was looking for gave him clues about the state of the empire, its operational effectiveness, happiness of its citizens, its direction, its capabilities, and what he could draw on. What are the revealing questions you could ask today?
A country’s strategic industries are certainly different from the 1800s.
The pandemic alone should’ve taught the UK that the entire west relies heavily on China for production of a lot of basic medicines. That’s concerning. It certainly relies on China for a lot of manufacturing of basic but important medical equipment too. Mark Zuckerberg’s Meta virtual/augmented reality news is also something to think about.
How comfortable is the UK with the idea of China controlling a lot of technology manufacturing, and easy access to intellectual secrets/innovations?
China is very good at controlling actual reality let alone a virtual one. The China-Taiwan tensions keep brewing. China’s been threatening Taiwan that its military won’t stand a chance if it invades. China is threatening that any outside interference will mean paying a price. Meanwhile, the world relies on Taiwan for semiconductors which go in everything. Xi promises that China and Taiwan will be reunited.
How is Hong Kong doing?
Strategic industries are no longer just about simpler things like coal and steel production for tanks and munitions. They’re also about the materials and methods of fourth and fifth generation warfare, like rare earth metals and this sort of thing.
It seems the Johnson government is at least a little but wiser to China.It’s hard to believe how cosy Cameron was prepared to get with Xi Jinping. They wanted to make Macclesfield (of all places!) the end point of the Belt and Road Initiative.
Have a look at this selfie. Cameron, soy-faced, submissively leaning in. Sergio Aguero’s having a great time, that’s fine. Xi looks like he’s holding his tongue. It’s not a meeting of peers. One has real power and the other doesn’t. This is a picture of the Emperor of China wondering how much longer he has to humour the Gap Yah guy. Is Cameron oblivious? If he is, he’s like that guy who thought he made friends with a wild Alaskan grizzly and got eaten. Does he understand what kind of animal he’s dealing with? Of course, Xi is a silly willy nilly old bear.
If Cameron wasn’t oblivious, was he just resigned to the idea of securing British comfort as a supplicant to China?
When did the west start calling Xi “President” and stop calling him “Chairman”? “Zhuxi” means “Chairman”. Xi is still “General Secretary” of the Chinese Communist Party, a title which originates with Stalin’s own role as General Secretary. That title has its own interesting history. Does “President” hide his shame? Why is the UK still sucking up to a communist by using a less embarrassing and false translation of his title?
Anyway, never mind China, what about everyone else?
Sovereignty
The UK doesn’t need to pursue absolute autarky, but it will have to think about what its strategic industries are and how much control it wants over them for how much independence.
Alignment with the US-led order has been convenient for the UK’s comfort. Countries which don’t submit to the US (e.g., Russia, Iran, North Korea, Iraq, Syria, Venezuela), find themselves poorer and squeezed. They haven’t helped themselves either. The obvious exception is China. Is it too big? Did Nixon miscalculate? The US was supposed to be a military power, China an economic one. That unspoken deal doesn’t seem to be holding. That calculation is probably changing too for everyone else as the US becomes relatively weaker and China relatively stronger.
For now, easy prosperity clearly hasn’t been everything to every country. Not everyone follows the first rule of the Satanic bible. All hail GDP, the one true measure of successful government! Sovereignty means answering to nobody else, and that’s valuable too. It has also meant that these countries develop and control a lot of their own technology. Russia and China in particular. Though it’s also a US protectorate, Israel is notable too for its self-reliance and the level of independence that affords it, regionally, at least.
Can the UK become a “Science and Tech Superpower” by 2030?
For everything it would need to achieve that, how much does it need to learn? How much of the basics does it need to relearn? Outsourced manufacturing and international, mobile academia are not a stable starting point. Knowledge fades with the people who have it, who today can move and work from anywhere.
What ties these people to the UK? What stops them from working for someone else?
The UK’s place in the world will be affected by how much it can bring under its own control.
What’s the plan?
Does anyone have any confidence that there’s any one person in the government who properly understands 1) the UK’s own state of affairs, 2) how that sits internationally, 3) what the reasonable goals are, 4) how to work toward them, and 5) has the power to make it happen?
Until the UK has that it is getting ahead of itself in any discussion about what its place in the world should be.
Photo Credit.