isramart : China, India Lash out at Talk of ‘Carbon Tariffs’

isramart news:
China and India have denounced the possibility that developed countries might impose ‘carbon tariffs’ on goods imported from countries that do not strictly regulate their greenhouse gas emissions. Such a policy would “protect trade in the name of protecting the environment,” China’s Ministry of Commerce said on Friday, media sources reported.

”This will not help strengthen confidence that the international community can cooperate to handle the (economic) crisis, it also will not help any country’s endeavours during the climate change negotiations, and China is strongly opposed to it,” the ministry said.

The public statement, posted on the ministry’s website, came one week after the US House of Representatives passed a bill that includes a provision for such ‘border tax adjustments’ (see Bridges Weekly, 1 July 2009, http://ictsd.net/i/news/bridgesweekly/49962/). Some US lawmakers consider the measures essential for ensuring that rapidly emerging economies pull their weight in reducing the world’s greenhouse gas emissions. But China insisted on Friday that the idea of carbon tariffs violates the spirit of the Kyoto Protocol, which holds that rich countries should bear a heavier burden than poor countries in mitigating climate change.

Reactions in India were similarly scathing.

”We are completely surprised and rather dismayed by the development. This is an attempt to bring trade and competitiveness into environmental negotiations,” a top Indian climate negotiator told Reuters, referring to the US legislation.

”This is the quid pro quo for cap-and-trade, but the international community can’t be held down by the domestic political compulsions of President Obama,” the official said.

Some analysts said the measures amounted to bullying and trade protectionism in uncertain economic times.

”I think they are using it as a means to pressure developing countries to cut more GHG emissions,” said Zhang Haibin, a professor and an adviser to China’s Ministry of Commerce, according to a report in China’s state-owned China Daily newspaper.

”But if the US takes unilateral action without proper multilateral consultations and agreements it could spark big trade disputes, or even a trade war,” he said.

But there is still no guarantee that the border taxes included in the House version of the US climate bill will ever make it into law. The Senate has yet to vote on its version of the legislation, and US President Barack Obama publicly denounced the tariff measures soon after the House bill passed.

”At a time when the economy worldwide is still deep in recession and we’ve seen a significant drop in global trade, I think we have to be very careful about sending any protectionist signals out there,” Obama said last week, according to The New York Times.

ICTSD reporting; “US Carbon Tariffs, Still Long Way Off, Draw Asia Ire,” REUTERS, 6 July 2009; “Carbon tariff ‘an excuse’ to protect trade,” CHINA DAILY, 4 July 2009; “Obama Opposes Trade Sanctions in Climate Bill,”