The Public Policy

Stay Poor

That's the new message from rich green nations to developing countries.

By 2.14.08

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It's bad enough when European and American politicians desperate to "do something" about global warming appear willing to sacrifice economic growth in their own countries. Now they are ready forsake the world's poorest citizens, too.

For 15 years, developing countries like China and India have refused to join the crusade against climate change because the solution to global warming -- reducing greenhouse gas emissions -- hurts their number one priority, economic growth. That is, poor countries chose the fight against poverty over the fight against climate change.

Until a few months ago, developed countries formally respected developing nations' "right to develop," as it's known in diplomat-speak. The first major international treaty to address global warming, the Kyoto Protocol, exempted developing countries altogether from binding emissions reductions.

This arrangement worked as long as rich countries ignored their promises to fix the climate. Developed countries first agreed to undertake emissions reductions at the 1992 Rio Earth Summit. They haven't, and global emissions have continued to rise. The Kyoto Protocol has been another failure, which is why Canadian Prime Minister Stephen Harper says that it "divided the world into two groups, those that would have no targets, and those that would meet no targets."

RECENTLY, HOWEVER, politicians in Europe and America have indicated that they intend to get serious about climate change. Now that costly emissions reductions are at hand, leaders in developed countries have decided that they want to orchestrate a global response to global warming, irrespective of the human consequences -- whether developing nations like it or not.

To force developing countries to reduce their carbon footprint, politicians in developed countries have embraced a novel, if sinister, solution: global warming tariffs. By taxing the carbon footprint of imports, the United States and the European Union's member states would export emissions regulations to developing countries.

Support for a carbon tariff is said to be strong among EU bureaucrats in Brussels. And French President Nicolas Sarkozy has promised to "defend the principle of a carbon compensation mechanism (i.e., a carbon tariff) at the EU's borders with regard to countries that don't put in place rules for reducing greenhouse gas emissions."

In the U.S., import duties are a part of the Lieberman-Warner climate change bill now making its way through the Senate. The Bush administration has given mixed signals. A month ago, U.S. Trade Representative Susan Schwab told reporters that the administration had "been dismayed at a variety of suggestions where we see climate or the environment being used as an excuse to close markets."

A week later, however, the U.S. Ambassador to the European Union, C. Boyden Gray, gave European journalists a different perspective. According to the Bureau of National Affairs, Ambassador Gray said that the EU and America would "have no choice" but to enact carbon tariffs if developing countries did not voluntarily commit to emissions reductions.

Clearly, carbon tariff policies are gaining political traction in rich countries. That should worry advocates for the world's poorest citizens, because free trade is the surest ticket out of poverty.

By facilitating the unfettered flow of finance, goods and services across national boundaries, trade liberalization allows developing countries to use their comparative advantage -- abundant, inexpensive labor -- to produce goods and services for the global marketplace at competitive prices. According to the World Bank, free trade policies enacted in the 1980s caused a shift in manufacturing and service activities from rich to poor countries that delivered more than 100 million people out of poverty during the 1990s.

Carbon tariffs are designed to mitigate climate change, but they would also mitigate wealth creation. Rich-country politicians need to acknowledge the profound human toll of global warming protectionism before they try to force developing countries into an international scheme to fight climate change.

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About the Author

William Yeatman is an energy policy analyst at the Competitive Enterprise Institute.