…environmental economics and the implications of environmental policy

Archive for the ‘competitiveness. climate change’ tag

Affordability, China and Leakage — Debunking the “China Competitiveness Refrain”

with one comment

What I now see as a primary goal of climate policy researchers is to address one by one the important climate policy questions that are oft cited as reasons for inaction. Competitiveness of course tops this list. Simply, folks argue that with domestic climate policy our exporters and other domestic producers will be unfairly disadvantaged given the lack of a carbon signal in most of the world’s economies. And one does not hear questions of competitiveness mentioned without the requisite decry of China and leakage. Leakage involves transferring production to China, either in the form of increased market share, or by putting our manufacturing base on a slow boat to China.

And then along comes a reporter who pulled one of the few nuggets out of a recent conference in Ottawa. I know because I was at the Conference, A Way Forward, hosted by IISD. The main reasons there were so few nuggets may seem surprising but the conference focused on a post-2012 climate policy world and well, the Bali Roadmap really raises more questions than answers and thus it was hard to sort our all the conjecture.

So, when Peter Gorrie published this in the Toronto Star I was truly amazed. This is a good piece of reporting and really addresses a fundamental question and roadblock to domestic action—namely China is doing nothing so why should we? Here is the gist of the article,

No gasoline-powered car assembled in North America would meet China’s current fuel-efficiency standard.
Even vehicles produced under California’s proposed, and much praised, efficiency law – being fought tooth and nail by the U.S. and Canadian governments and the auto industry – wouldn’t come close to the Chinese mileage limits.
If that’s a shock, take a deep breath. There’s more…

To be sure, China faces massive environmental problems…Still, it is doing far more than Canada, the U.S. or just about any other place to clean up its act. It has begun to impose regulations and targets for car emissions, renewable fuels, carbon storage, forest renewal, energy efficiency and industrial pollution. It’s investing heavily in new technologies, including “clean” coal and alternative power sources. In many ways it’s putting us to shame.

So, next time someone brings up the China competitiveness refrain quietly remind them that China may not have a binding cap under Kyoto, but they don’t need one. They see value in burning less fuel. And quietly, China is doing more than Canada.

Written by Dave Sawyer

March 9th, 2008 at 3:54 pm