Institute for Environmental Security
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Trade and Climate
18 July 2009
An opinion published in the New York Times on 18 July 2009 highlights the interwovenness of climate and trade policies and insists on the necessity to consider both issues if we are to be successful in either one of them.
The House of Representatives proved the point last month when it passed a climate bill that would impose trade penalties on countries that do not accept limits on carbon emissions. Last year, the European Commission approved the idea of an ?equalisation? levy on imports from countries that have not agreed to cut emissions.
President Obama rightly opposed the penalties in the House bill. Unilateral sanctions are unlikely to work and more than likely to provoke a dangerous protectionist tit-for-tat trade war. Yet if the world?s biggest emitters of CO2 ? including the United States, China and India ? fail to reach an agreement at a meeting in Copenhagen in December, the temptation for countries that accept limits on emissions to impose unilateral sanctions on countries that do not could well become irresistible.
But such tariffs must be part of an international agreement on climate change. Unilateral penalties against fast-growing polluters like China and India would be seen as illegitimate and could easily backfire, scuttling chances of an agreement on climate issues. Congress must refrain from putting sanctions in its climate bill.
Further, any deal must set clear guidelines on how to identify and quantify transgressions and establish appropriate countermeasures. It also must not open a backdoor for protectionism. Without such a deal, trade is going to have problems. Failing to conclude the current negotiations will be the least of them.