A common refrain among those who oppose action on climate change is something along the lines of “Why should we take action? It won’t matter what we do, if China doesn’t do anything.”

There is a superficial logic to this statement, but it lacks a proper understanding of the root causes of many global emissions and how they are allocated to players on the international stage.

First, it’s right to acknowledge that China is the world’s leading carbon emitter, a mantle that it took over from the USA in 2005 as it went through a huge expansion of its coal-fired power sector.

During that period of rapid increase in China, countries like the U.K. congratulated themselves as they wound down their coal-fired power sectors and reduced emissions. Today, the U.K. government continuously touts its achievement of bringing down emissions down 44% since 1990.

Sinners into saints

However that is really only a conclusion that you can arrive at if you use very incomplete accounting.

According to CarbonBrief,

Even though domestic emissions have fallen 27% in the UK between 1990 and 2014, once CO2 imports from trade are considered this drops to only an 11% reduction. Similarly, a 9% increase in domestic US emissions since 1990 turns out to be a 17% increase when trade is included.

This puts the performance of the US into even sharper contradiction with its political protestations about China’s emissions.

While the US has seen tiny incremental reductions in its officially accounted emissions between 2014 and 2017, it exported 352 million tonnes of carbon emissions in just the year 2014. And even the most apparently virtuous stewards of nature are not immune to shaming when their trade in carbon emissions is evaluated.

In one extreme case, Switzerland’s emissions are 209% higher (more than three times as large) once CO2 imports are taken into account, due to large imports and exports containing little in the way of embedded carbon.

So if the U.K. and the US are effectively exporting their carbon emissions to other countries, then where are they being exported to?

China acts like the advanced world’s Picture of Dorian Gray

Well, no prizes for guessing, they are being exported to low-cost, highly carbon intensive manufacturing economies with China at the head of the list for pretty much every advanced country that is currently crowing about its progress on reducing emissions.

In 2014, China imported 1.37 billion tonnes of carbon emissions from trading partners, equivalent to 13% of its total emissions. With a growing economy, growing connection to new markets with the One Belt One Road strategy and growing share of global trade, that number is likely to be rising.

None of this is to say that China is anything but a grave threat to the climate and that it does not need to radically and rapidly reform its energy system. But when opponents of domestic action on climate change bleat about China being to blame for everything, remind them that China is in fact just doing our dirty work (literally) and that the true picture of responsibility for emissions shows that we lack a lot of the moral authority that we think we have.

Border Adjustment Taxes protect domestic industry and lay bare true responsibility for emissions

The Carbon Fee and Dividend model of carbon pricing includes a border adjustment tax that applies tariffs on imports from countries that do not sufficiently price carbon themselves. This restores proper responsibility for the emissions to the importer of the goods.

It also has the effect of levelling the playing field for domestic producers bearing the downstream effects of carbon fees from unfair competition from overseas producers using cheap but dirty energy. Indeed as the domestic energy supply decarbonises and the carbon fees applied diminish, the domestic producer gains a bigger and bigger differential advantage against dirty imports as its carbon costs fall while border adjustment taxes continue to apply to carbon-intensive imports.

Given the current trajectory of the energy system in the U.K. in contrast to that in China, Carbon Fee and Dividend provides a strong, fair and effective protection of the U.K. manufacturing sector against unfairly cheap competition from China, which has been exploiting its unsustainable practices for years to systematically erode U.K. manufacturing.

CF&D is therefore a jobs- and economy-friendly measure for U.K. industry.


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