Cap-and-trade-war
30th June 2009
The bottom line about the international aspects of climate change is that the very idea of an effective response assumes the existence of a generally cooperative international environment. It doesn’t assume the non-existence of the odd “rogue” state here or there, but it assumes the absence of any kind of serious great power rivalries. Not just China, but also India and probably Russia, Brazil, and Indonesia as well are going to need to cooperate in a serious way with the OECD nations on this. And I just don’t see how you’re going to get where you need to get through coercion. If anything, I think attempted economic coercion of China is more likely to wind up breaking down solidarity between the US, EU, and Japan than anything else. First, we impose our carbon tariff. Then suddenly Airbus and European car companies are getting all kinds of sales because the EU hasn’t followed suit. Now not only are the Chinese mad at us, we’re mad at the Europeans. Optimistically, at this point everyone decides coercion is unworkable and we start to back away.