Australia's #1 industrial directory for equipment & suppliers

Think before imposing carbon tax, experts warn

27 September, 2012

Calls for carbon taxes to tackle global warming often dodge the complexity of this issue, with the risk hasty action could damage the world economy and fuel the greenhouse-gas problem, experts have warned.

Carbon taxes — levies that would be imposed on goods according to the carbon dioxide emitted in making them and shipping them — have been proposed by some as a way of curbing warming gases.
 
The idea is furiously opposed by developing giants, especially China — the world's No.1 manufacturer and carbon emitter by volume.
 
In a study published in the journal Nature Climate Change, German specialists caution the question is complex and a potential minefield.
 
"Typically in the West, we import goods whose production causes a lot of greenhouse-gas emissions in poorer countries," Michael Jakob of the Potsdam Institute for Climate Impact Research (PIK), said.
 
"It is a contested question to which countries these emissions should be attributed."
 
In a 2010 study, imports to the United States were shown to contain on average 777 grams of carbon dioxide per dollar.
 
Exports from America, though, were far less carbon-intensive, at 490 grams of CO2 per dollar.
 
The picture for China, though, was quite the opposite: its imports were just 49 grams per dollar, but its exports were a whopping 2180 grams per dollar.
 
But these raw facts are misleading for several reasons, says the study.
 
For one thing, China's higher CO2 output is caused in part by demand for its goods in the United States, which is running a huge trade deficit.
 
"We can show that of the CO2 flowing into the US in (the) form of imported goods, almost 50 per cent are due to the American trade deficit alone," Jakob said.
 
Other confounding factors are the economic role taken by developing countries, which are "relatively more specialised in the production of dirty goods", and also energy efficiency, says the paper.
 
A typical export from Western countries to developing giants is machine tools, which are then used to make products such as toys.
 
These machines are made in the West using comparatively low-carbon industrial techniques.
 
But when they are plugged in and used, they are usually powered by coal-fired electricity, the dirtiest of the main fossil fuels.
 
In such conditions, a carbon tax would be counter-productive.
 
To do so could prompt the developing country to make its own machines, which are likely to be more energy-intensive. This in turn would drive up the carbon tax on what was manufactured.
 
"In the end, interventions in world trade could do more harm than good," said co-author Robert Marschinski.
 
CO2 transfers alone "are not enough as a basis" to justify carbon taxes, he said.
 
What really counts is how clean or dirty national energy production is, he said.
 
Taxes "cannot replace what it really takes — more international co-operation" to set a goal for curbing carbon emissions, supplemented by help for greater energy efficiency and regional emissions-trading systems, he said.
 

Have your say...

We welcome thoughtful comments from readers
Reload characters
Type the characters you see in this box. This helps us prevent automated programs from sending spam.