Friday, December 18, 2009

Copenhagen Compromise

The Copenhagen Climate Conference inevitably concluded without meaningful decision.  It's not such a bad thing since the entire premise of the conference was flawed.  The $100 billion (if it materialized) is simply more aid to poor countries, dressed up in green.  Most donor countries are likely to shift earmarks for aid to green projects, further distorting consumption and production decisions in those countries that can least afford the subversion of the market mechanisms needed for their economic wellbeing.

The U.S. has refused to directly help China and other emerging countries remediate carbon emissions. This is hypocritical since a majority of the factory production in apparel, consumer electronics, industrial machinery, and furniture consumed in the U.S. comes from China. The anthropogenic carbon cycle needs to be analyzed across the entire value chain, from pre-production to post-consumption.  In this light, the U.S. consumer’s carbon footprint is not only global, it is vast.

If we were really serious about carbon emissions reduction, we would gladly pay China and transfer the technology needed to lower OUR carbon footprint. If there is no political will to impose a carbon tax at home to pay China, we can at least not stand in the way of the necessary export carbon tariffs they would need to invest in clean production technology, non-carbon based energy research, and training. Failing all this, we should probably seek economic integration with China. Economic integration would make transparent the true cost of consumption. 

Of course all this will greatly raise prices at home, lower consumption, reduce production in China, and slow global economic growth.  We will have to live in smaller houses, buy one less pair of shoes, acquire less furniture, drive smaller cars, and get by with lower paying jobs.

All this, of course, will not happen.  Not in America.  Thank goodness.  Instead, we have cap and trade to make us feel better.

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