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Who should bear the carbon cost of exports?

March 6, 2009 By Philip PB Ball This article courtesy of Nature News.

China has become the world's biggest carbon emitter partly because of its exports. So whose responsibility is that, asks Philip Ball?

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There was once a town with a toy factory. Everyone loved the toys, but hated the smell and noise of the factory. 'That factory boss doesn't care about us', they grumbled. 'He's getting rich from our pockets, but he should be fined for all the muck he creates.' Then one entrepreneur decided he could make the same toys without the pollution, using windmills and water filters and so forth. So he did; but they cost twice as much, and no one bought them.

Welcome to the real world. Right now, our toy factory is in China. And according to an analysis by Dabo Guan of the University of Cambridge and his colleagues, these exports have helped to turn China into the world's biggest greenhouse-gas emitting nation1,2.

That China now occupies this slot is no surprise; the nation tops the list for most national statistics, simply because it is so big. Per capita emissions of CO2 are still only about a quarter that of the United States, and gasoline consumption per person in 2005 was less than 5% that of Americans.

It's no surprise either that China's CO2 emissions have surged since it became an economic superpower. In 1981 it was responsible for 8% of the global total; in 2002 this reached 14% and by 2007, 21%.

But what is most revealing in the new study is that about half of recent emissions increases from China can be attributed to the boom in exports. Their production now accounts for 6% of all global CO2 emissions. This invites the question: who is responsible?

Exporting the problem

Needless to say, China can hardly throw up its hands and say: "Don't blame us – we're only giving you rich folks what you want." After all, the revenues from exports are contributing to the remarkable rise in China's prosperity.

But equally, it would be hypocritical for Western nations to condemn China for the pollution generated in supplying them with the cheap goods that they no longer care to make themselves. Let's not forget, though, that China imports a lot too, thereby shifting those carbon costs of production somewhere else.

Part of the problem is that China relies on coal for 70% of its total energy requirements. Nuclear and renewables supply only 7%, and while Chinese energy production has become somewhat more efficient, any gains there are dwarfed by increased demand.

One response to these figures is that they underline the potential value of a globally agreed carbon tax. In theory, this builds the global-warming cost of a product — whether a computer or an airplane flight — into its price. Worries that this enables producers simply to pass on that cost to the consumer might be valid for the production of essentials such as foods. But much of China's export growth has been in consumer electronics, which require an immense amount of energy to build. Exports of Chinese-built televisions increased from 21 million in 2002 to 86 million in 2005. Why shouldn't consumers feel the environmental cost of luxury items? And won't the hallowed laws of the marketplace ultimately cut sales and profits for manufacturers who simply raise their prices?

Tax or trade?

Some environmentalists are wary of carbon taxes because they fail to guarantee explicit emissions limits. But the main alternative, cap-and-trade, seems to have bigger problems. Under the cap-and-trade scheme, carbon emitters — nations, industrial sectors, even individual factories or plants — are given a carbon allocation but can exceed it by buying credits from others. That's the scheme currently adopted in the European Union, and preferred by the Obama administration in the United States.

The major drawback is that cap-and-trade makes costs of emissions virtually impossible to predict, and susceptible to outside influences such as weather or other economic variables. The result would be a dangerously volatile carbon market, with prices that could soar or plummet — as they are doing now under the European Union's scheme because of the economic downturn.

Either a carbon tax or a cap-and-trade scheme arguably offers a 'fair' way of sharing the carbon cost of exports. But the Chinese picture reinforces the need for a broader view too, in which there is rational self-interest in international collaboration on sharing technologies that reduce emissions and increase efficiency.

These figures also emphasize the underlying dilemma. As Laura Bodey puts it in Richard Powers' 1998 novel Gain, as she fights ovarian cancer that may have been caused by a nearby chemical plant that has given her all kinds of convenient domestic products: "People want everything. That's their problem."

References

  1. Guan, D., Peters, G. P., Weber, C. L. & Hubacek, K. Geophys. Res. Lett. 36, L04709 (2009).
  2. Weber, C. L., Peters, G. P., Guan, D. & Hubacek, K. Energy Policy 36, 3572–3577 (2008).

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