Is the ETS/cap & trade going to end up being a version of Smoot Hawley?
I didn’t think this until recently when I was speaking to friend involved in mining. He explained that the ETS will have the effect of taxing exports and despite industry groups pointing this out at numerous meetings the government feels it can’t back down from the election commitment it made otherwise it would incur scorn from the Green groups.
Incredibly this push towards fewer emissions through the ETS could end up encouraging marginal mining to become competitive elsewhere in the world perversely having ZERO effect on global emissions.
Meanwhile the Congressional reps have passed a bill containing provisions to tax imports declared to be carbon intensive from countries deemed lax in taxing carbon emissions under the various provisions of the act. Everyone’s antennae should be raised as this could be a cover for protectionism under the guise of eco-taxes and we end up with the big players beginning to tax each others exports and we end up in Dante’s Inferno. The Congressional Reps are not exactly known as big free trade supporters even in boom times.
The recent US/China discussions in preparation for the Copenhagen round went as well as you’d expect. It didn’t. They were so wide apart it isn’t funny and unless this was just political posturing on their part the chances of reaching some sort of workable agreement in December is zero.
I guess our resolve to set an example to the rest of the world doesn’t appear to have been a resounding success at this meeting. I tried and tried but I couldn’t imagine either of the two sides at the bi-lateral meeting saying “ look we have to reach an agreement because Australia is putting forward an ETS”. Somehow I couldn’t see it happening☺ Next time someone says we need to do the ETS in order to set an example we should ask them how Europe’s “ example” has been fairing in turning heads as they have been busily appearing to set movable targets for about a decade now. How’s that “ example been working out?
Cap and trade could really end up being Smoot Hawley in drag?