Thank goodness for the Chinese. Together with India, China helped guarantee that this week’s G-8 meeting failed to reach any agreement on limiting carbon-dioxide emissions. Ironically, the actions of the People’s Republic should help America avoid going further down the road of over-regulation.
The refusal of China and India to go along with the carbon-dioxide limits should be the death knell for the Cap and Trade bill currently being considered by the Senate. The legislation is a pretty hard sell. Even advocates admit restrictions would only have a small effect — only a fraction of 1 degree Celsius, a virtually unnoticeable .07 degrees — on global temperatures by 2050.
Even if a worldwide agreement made sense, an agreement without China, India and other developing countries can be counterproductive. It could actually mean more, not less, carbon-dioxide emissions. With massive increases in energy costs for the United States, Europe and Japan, energy-intensive manufacturing will move to countries without limits. That would negate some of the carbon-dioxide reductions in countries with limits.
But the problem is worse than that. China, India and other less-developed countries generally use energy less efficiently. That means that any given product built in China or India results in even more carbon dioxide than if it were built in the West. If more energy-intensive manufacturing moves to China and India, the volume of shipping will grow to get those products to consumers around the world. Shipping consumes a great deal of fossil fuels.
Democrats in the House of Representatives partially understood these problems and tried to stop this flight of manufacturing with a provision that would tax imports from countries that don’t regulate their carbon emissions. The Obama administration correctly warned that this provision would lead to a trade war, which would completely dislocate the economy. This week, Senate Democrats, led by Sen. John F. Kerry of Massachusetts, announced that they would strip that House provision out of the Senate bill.
Without China and India, Cap and Trade will mean an even bigger loss of manufacturing jobs. Without these other countries on board for the regulation, Americans will suffer punitive energy taxes and still face a possible increase in carbon emissions. From every angle, Cap and Trade is a lose-lose proposition.