Wen Jiabao believes developed countries must change their unsustainable lifestyles to cut greenhouse gas emissions.
He’s correct. But his call could backfire spectacularly.
Addressing a conference on climate change last Friday, Premier Wen told the rich world to clean up its act. “Developed nations should change their unsustainable way of living, radically reduce their emissions of greenhouse gases and help developing countries get on a track of sustainable development,” he said.
He’s right, of course. As the first of the two charts below shows, the inhabitants of rich countries are responsible for spewing out far more greenhouse gases than their poor world counterparts.
But Mr Wen may come to regret his rash demand. One of the most effective ways the inhabitants of rich countries could cut the amount of greenhouse gases they are responsible for pumping into the atmosphere would be to import less from China.
In recent years the developed world’s imports from China have soared as rich countries outsourced their manufacturing industries to the Pearl River and Yangtze River deltas in order to hold down consumer prices.
But in doing so, developed economies have also outsourced a hefty proportion of their greenhouse gas emissions to China.
In 2006, according to figures from the European Union, Britain pumped out 652 million tonnes of carbon dioxide.
But in a study published last year, Oxford University economist Dieter Helm estimated that by importing manufactured goods from China, Britain was responsible for an extra 125 million tonnes of emissions.
In other words, if you factor in the greenhouse gases emitted during the manufacture of Britain’s imports from China, Britain’s output of carbon dioxide rises by 20 per cent. And that’s before you even consider all the greenhouse gases pumped out by the ships which transport those goods half way round the world, and the emissions involved in shipping the necessary raw materials and components to China from elsewhere.
Other studies agree. A report published last year by the New Economics Foundation points out that Britain imports 50,000 tonnes of Christmas decorations a year from China. “It is demand from countries like the UK which leads to smoke from Chinese factories and power plants entering the atmosphere. As a result, China has become the environmental or ‘carbon’ laundry for the western world,” the report argued.
Even worse, because China relies more on fossil fuels than developed economies, manufacturing in China results in more greenhouse gas emissions for each product made.
If the true cost of all greenhouse gas emissions were reflected in the price of manufactured goods, cheap imports from China would no longer appear so attractive to rich world consumers.
It’s a thought that has occurred to French President Nicolas Sarkozy. In March, he called on the European Union to impose a carbon tax on imports from countries that “don’t play the game” on climate change.
The idea also appeals to US president-elect Barack Obama, whose campaign manifesto proposed rewriting America’s international trade agreements to impose US environmental standards on imported goods.
At a time when developed economies are slowing, such proposals are likely to strike a popular note among US and European workers anxious to keep their jobs and worried about the competitive advantage that lax environmental standards and slack enforcement confers on manufacturers in China.
If the true cost of greenhouse gas emissions were reflected in import prices, rich world consumers could indeed begin to change their habits, as Mr Wen believes they should.
But the impact on China’s export industries would be devastating. As the second chart below shows, the growth of China’s manufactured goods exports has fallen by two-thirds over the past two years.
If the rich world now heeds Mr Wen’s call to change its unsustainable lifestyle, imports from China are likely to be among the first casualties, and China’s exports could soon begin to contract. Mr Wen may soon come to regret his words, even if they were right.
1 comment:
Be careful what you wish for, Mr Wen
Tom Holland
10 November 2008
Wen Jiabao believes developed countries must change their unsustainable lifestyles to cut greenhouse gas emissions.
He’s correct. But his call could backfire spectacularly.
Addressing a conference on climate change last Friday, Premier Wen told the rich world to clean up its act. “Developed nations should change their unsustainable way of living, radically reduce their emissions of greenhouse gases and help developing countries get on a track of sustainable development,” he said.
He’s right, of course. As the first of the two charts below shows, the inhabitants of rich countries are responsible for spewing out far more greenhouse gases than their poor world counterparts.
But Mr Wen may come to regret his rash demand. One of the most effective ways the inhabitants of rich countries could cut the amount of greenhouse gases they are responsible for pumping into the atmosphere would be to import less from China.
In recent years the developed world’s imports from China have soared as rich countries outsourced their manufacturing industries to the Pearl River and Yangtze River deltas in order to hold down consumer prices.
But in doing so, developed economies have also outsourced a hefty proportion of their greenhouse gas emissions to China.
In 2006, according to figures from the European Union, Britain pumped out 652 million tonnes of carbon dioxide.
But in a study published last year, Oxford University economist Dieter Helm estimated that by importing manufactured goods from China, Britain was responsible for an extra 125 million tonnes of emissions.
In other words, if you factor in the greenhouse gases emitted during the manufacture of Britain’s imports from China, Britain’s output of carbon dioxide rises by 20 per cent. And that’s before you even consider all the greenhouse gases pumped out by the ships which transport those goods half way round the world, and the emissions involved in shipping the necessary raw materials and components to China from elsewhere.
Other studies agree. A report published last year by the New Economics Foundation points out that Britain imports 50,000 tonnes of Christmas decorations a year from China. “It is demand from countries like the UK which leads to smoke from Chinese factories and power plants entering the atmosphere. As a result, China has become the environmental or ‘carbon’ laundry for the western world,” the report argued.
Even worse, because China relies more on fossil fuels than developed economies, manufacturing in China results in more greenhouse gas emissions for each product made.
If the true cost of all greenhouse gas emissions were reflected in the price of manufactured goods, cheap imports from China would no longer appear so attractive to rich world consumers.
It’s a thought that has occurred to French President Nicolas Sarkozy. In March, he called on the European Union to impose a carbon tax on imports from countries that “don’t play the game” on climate change.
The idea also appeals to US president-elect Barack Obama, whose campaign manifesto proposed rewriting America’s international trade agreements to impose US environmental standards on imported goods.
At a time when developed economies are slowing, such proposals are likely to strike a popular note among US and European workers anxious to keep their jobs and worried about the competitive advantage that lax environmental standards and slack enforcement confers on manufacturers in China.
If the true cost of greenhouse gas emissions were reflected in import prices, rich world consumers could indeed begin to change their habits, as Mr Wen believes they should.
But the impact on China’s export industries would be devastating. As the second chart below shows, the growth of China’s manufactured goods exports has fallen by two-thirds over the past two years.
If the rich world now heeds Mr Wen’s call to change its unsustainable lifestyle, imports from China are likely to be among the first casualties, and China’s exports could soon begin to contract. Mr Wen may soon come to regret his words, even if they were right.
Post a Comment