by Michael Bastach
When President Donald Trump unveiled plans to withdraw the U.S. from the Paris climate accord last year, he voiced his concern the Obama-era deal would amount to an international wealth transfer.
Trump pointed out the Paris accord “doesn’t eliminate coal jobs, it just transfers those jobs out of America, and ships them to other countries,” he said in a Rose Garden speech last year.
A new report shows Trump’s broader argument that emissions-intensive activities would not be eliminated, but moved overseas was probably correct. Industries have been moving operations overseas to poorer countries with fewer regulations.
The report, funded by the ClimateWorks Foundation, found that countries are increasingly “outsourcing” their emissions to other countries, like China and India.
Indeed, it’s a problem conservatives have warned about for years when it comes to climate policies — regulations emissions in, say, the U.S. will only encourage carbon dioxide-heavy industries to relocate overseas.
That’s exactly what’s been happening, according to the new report.
If those outsourced emissions were included “many promising climate trends would be negated or reversed,” reads the report by researchers with KGM & Associates and Global Eciency Intelligence LLC.
“It is estimated that 20-30% of global CO2 emissions are part of the carbon loophole; that is, these emissions comprise of goods and services that are internationally traded,” reads the report.
Trump was heavily criticized by European officials for deciding to leave the Paris accord, which the Obama administration joined in 2016 alongside China. However, many of those countries are major outsourcers of emissions.
In fact, the report details how emissions cuts of some of the biggest proponents of the Paris accord, from Germany to the U.K. to Japan, were much smaller once outsourced industrial activity was included.
“In Europe, Germany, the UK, France, Italy, and Spain are significant net importers,” according to the report. “Asia, India, Russia, and Korea are major net exporters. Japan, Thailand, Australia, Turkey, and Brazil also stand out as notable net importers of embodied CO2.”
The U.S. committed to cut greenhouse gas emissions 26 to 28 percent by 2025 as part of the Paris accord, while Chinese officials only promised to “peak” emissions by 2030 — meaning they would increase in the meantime.
Of course, companies decide to relocate for a variety or reasons outside of the regulatory environment, and other factors, like labor costs and a qualified workforce, also come into play.
The ClimateWorks report goes on to suggest ways countries can account for and reduce CO2 emissions from international trade, suggesting they follow California’s lead and adopt legislation requiring “low-carbon” steel, glass and other industrial materials.
However, while the law encourages companies to source domestic steel, forcing the purchase of costlier steel may not achieve the results California hopes for. Again, it could just drive more development outside the state and add to the unaffordability of California homes.
Steel and aluminum tariffs imposed by the Trump administration are already benefiting domestic manufacturers, thereby inadvertently pushing companies to conform with California’s policy wishes.
The Trump administration could soon impose tariffs on $200 billion worth of Chinese goods as soon as Friday, according to CNN. U.S. officials already slapped tariffs on about $50 billion worth of Chinese goods this year.
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