An NYT story reports that President Obama "spoke out against a provision in the bill that would impose trade penalties on countries that do not accept global-warming pollution limits." If so, this is very encouraging. So I consulted the transcript of the interview upon which the Times' story was based, and here is what the President said:
Q. One of the provisions that got added very late to this bill that senators had expressed some reservations about was the one that puts tariffs on goods imported from countries that don't have these sort of restrictions. What do you think of that revision and would you like to see the Senate strip it out?This seems to be much more equivocal than the initial story suggested. The President certainly expressed skepticism about tariffs, but he hardly staked out a firm position -- we should be "very careful," we should study "whether the prospects of tariffs are necessary," but there "may" be alternatives. I hope the NYT's interpretation is correct, but I have my doubts.President Obama: At a time when the economy worldwide is still deep in recession and we've seen a significant drop in global trade, I think we have to be very careful about sending any protectionist signals out there. There were a number of provisions that were already in place, prior to this last provision you talked about, to provide transitional assistance to heavy manufacturers. A lot of the offsets were outdated to those industries. I think we're going to have to do a careful analysis to determine whether the prospects of tariffs are necessary, given all the other stuff that was done and had been negotiated on behalf of energy-intensive industries.
So certainly it is a legitimate concern on the part of American businesses that they are not disadvantaged vis-a-vis their global competitors. Now, keep in mind, European industries are looking at an even more ambitious approach than we are. And they obviously have confidence that they can compete internationally under a regime that controls carbons. I think the Chinese are starting to move in the direction of recognizing that the future requires them to take a clean energy approach. In fact, in some ways they're already ahead of us -- on fuel efficiency standards, for example, they've moved beyond where we've moved on this.
There are going to be a series of negotiations around this and I am very mindful of wanting to make sure that there's a level playing field internationally. I think there may be other ways of doing it than with a tariff approach.
On a tangential note, in the same interview -- which also included Energy Scretary Steven Chu and White House energy czar Carol Browner -- the latter erred when she suggested that CFC replacements were had yet to be developed when Congress enacted a CFC ban in the 1990 Clean Air Act. DuPont and other CFC producers began patenting and producing CFC substitutes years earlier. Indeed, these firms supported the CFC phaesout because it guaranteed a market for their alternative products.
Carry on, Beltway bandits.
So either the provision is removed from the bill or the bill is toast. And I suspect that the authors of the provision had just that effect in mind, and will fight to keep it.
Again I could be wrong, but I think the NYT got it right.
Why in HELL would we cripple our own industry with insane energy taxes ( aka c &T ), which is simply BEGGING them to build their next factories in China ???
I disagree. It's less than he said about the Buy American clauses, which were supposedly watered down but are still having a huge effect.
It's much, much less than he said on the campaign trail about auctioning emissions permits instead of giving them away, and that went absolutely nowhere.
It's also much, much less than he said about employer mandates for health insurance, or about possibly taxing employer health insurance, and those comments of his seem to be ignored by Congress.
President Obama seems as unwilling to reign in his own party in Congress as President George W. Bush was. They ignore his strongly worded statements all the time, and he still signs the bill. He was either never very serious with his claims, or he's allowing himself to be a weak President controlled by Congress.
I doubt they see it as "blatantly anti-American." Perhaps they believe (ahistorically) that being responsible is very American.
"That we are allowing entrenched incumbents in the Senate to become our only line of defense against creeping federal tyranny, which is quite opposite to the imaginings of the Founders?"
I think it's pretty foolish to look for any "defense against creeping federal tyranny" in a federal body. There's an innate institutional bias. As for the imaginings of the Founders, which Founders, exactly, did you mean? Many were champions of a powerful federal government, after all. Harkening back to the imaginings of "the Founders" as an undifferentiated mass is a suspect endeavor, given how factionalized they were.
More importantly, why take the opinion of long-dead men as authoritative? When they were so horribly wrong and hypocritical on many substantive issues?
This is different, bigger, and more complicated country than it was then.
This is different, bigger, and more complicated country than it was then."
Right. And even more importantly, we're a lot smarter than they were.
We agree that there are "alternatives." This includes us refusing to buy any more US debt to finance the record deficits you are enacting, and dumping the over $750 Billion in US bonds we have already purchased, which will immediately force the US economy into a deeper, long-term recession and higher unemployment, together with a lowering of US bonds to a "junk bond" rating status. Please considerably these alternatives carefully in determing whther the US should enact a bill that would impose trade penalties on countries that do not accept global-warming pollution limits.
We, of course, do not intend to dictate to a US President what US law or policy should be. We only wish to remind you of what is good for you.
Sincerly,
Chairman,
Central Committee
Communist Party
People's Republic of China
That doesn't mean it needs to be turned on right away. If I had to write cap-and-trade legislation, it would phase in with establishing the markets and auctioning off permits cheaply, and then clamping down as processes get established.
You also need to (slowly) turn on tariffs on imported goods that don't have a similar tax. One big things is that that country does not need to give us the funds; they can tax themselves at a similar rate, keep the money, and be exempt from the tariff.
Although it's possible to pass this unilaterally, the easiest way is to work with European countries that already want to take carbon-control measures. If we all agree to start taxing Chinese imports in 2011, we avoid the prisoner's dilemma issues.
(I would prefer a revenue-neutral carbon tax, but you would still need to turn it on slowly so the market can adjust, and you would still need a tariff from countries that don't tax their carbon.)
A consumer tax wouldn't need a tariff. If tax anything sold in the US on the basis of carbon, we'll tax Chinese-made goods as well. Only a producer tax needs a tariff.
That's a strong argument for a consumer tax.
If I run, say, a chair factory, I pay the carbon tax when I pay my energy bill. If I come up with a more efficient way to build chairs, I purchase less energy.
As a consumer tax, I would need to keep track of the carbon used in my chairs, and be able to justify it. It seems a lot more complicated than a producer tax, but of course I've waved away the problem of how to calculate the tariffs.
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