AMERICA鈥檚 giant steel-makers could be about to torpedo an international agreement on climate change.
Following lobbying by heavy industries, the US Congress is considering imposing tariffs on imports from China and other developing nations. That could be a deal-breaker for poor nations at December鈥檚 climate change talks in Copenhagen.
If Congress passes laws imposing a limit on US greenhouse gas emissions, energy-intensive sectors such as steel-making and cement manufacture would almost certainly face increased costs. Competitors in China and other developing nations not subject to similar restrictions 鈥� and China has said that it will not set itself an emissions target 鈥� might be able to produce steel more cheaply, and take business away from US firms.
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That logic has found its way into two climate bills now before Congress. The first, passed by the House of Representatives in June, would effectively impose tariffs on goods from companies in countries that do not have emissions targets. The newly introduced bill in the Senate so far contains only vague language about the need for a 鈥渂order measure鈥�, but senators from states with heavy industry will push for something similar.
That sets the stage for a showdown that could derail progress towards an agreement on climate change. In August, 10 pro-tariff senators, all of them Democrats, told President Barack Obama that it was 鈥渆ssential鈥� that climate change legislation include some form of tariff. Without the support of most or all of these senators, the climate bill appears likely to collapse, and if that happens Obama will have little to offer in Copenhagen.
If the tariffs remain in the bill, even in a draft form, key players like China and India will be alienated before the talks start. 鈥淐hina would be very frustrated and angry if the final bill includes carbon tariffs,鈥� says Zhang Haibin of Peking University, an adviser to China鈥檚 Ministry of Commerce.
There is still a way out of this bind, according to Jake Caldwell of the think tank Center for American Progress in Washington DC. Although China will not set itself emissions targets, it has said it will commit to reducing its carbon intensity 鈥� the amount of carbon emitted per unit of energy used or dollar of wealth created. If the goals are tough enough, Chinese industries would have to invest in cleaner technology, like their US counterparts. That might be enough to persuade the senators to soften their stance on tariffs.
