isramart: Cap and Trade: Ten Democratic Senators Call for Carbon Tariffs

Isramart news:
Okay, forget all that nonsense about how coal, or nuclear power, or natural gas will decide the Senate’s debate over the climate bill. It really seems to be boiling down to trade.

Today, ten Democratic senators sent President Obama a letter demanding a “level playing field” for U.S. manufacturing in any climate plan. In plain English: If you want your climate bill, you better include “carbon tariffs” to make sure U.S. jobs don’t scurry off to unregulated China.

The list of senators includes some heavyweights, but all are swing votes for the bill—Debbie Stabenow and Carl Levin of Michigan; Robert Byrd of West Virginia; Arlen Specter of Pennsylvania; Evan Bayh of Indiana; and Al Franken of Minnesota. Without the support of these lawmakers, you can stick a fork in the climate bill—it’s done.

“Any climate change legislation must prevent the export of jobs and related greenhouse gas emissions to countries that fail to take actions to combat the threat of global warming comparable to those taken by the United States,” reads the letter.

This whole notion of slapping “dirty” imports with a special tariff, in order to make foreign manufactures adhere to the same environmental standards as the U.S., gained traction (even with Paul Krugman) after the House included mandatory carbon tariffs in the Waxman-Markey bill.

The problem is that the White House, the Senate leadership, the United Nations, developing countries, Europe, and—at times—the World Trade Organization have all come out against tariffs.

There are a couple of problems with the idea of carbon tariffs, aside from the fact that they may—or may not—be illegal under WTO rules. For starters, the latest analysis of the impact of climate legislation shows that vulnerable industries—steel, cement, paper, chemicals and the like—will be amply protected by other provisions already included in climate legislation.

The bigger problem is whether the U.S. wants to wield a stick or a carrot. Plenty of academics figure the threat of tariffs will push already recalcitrant countries such as China and India even further away from the negotiating table; India has said as much.

Yet the ten senators take the opposite approach: “By eliminating the competitive benefit of not acting to address this global problem, it should spur countries to reach a comprehensive accord.”

President Obama has consistently pitched his energy and climate program as an engine of job creation. Now, he’ll have to show he can both protect jobs and steer clear of protectionism.