This is super important. We're always running in circles here in Germany because the dialog always ends up at: Why should we invest so much in green energy, if China outputs x times more than us. Now countries and companies have even more pressure to cut their emissions. Good job EU!
This is the reason why carbon tax will be at EU borders: if something is producing emissions and is sent to Germany or EU is will be taxed higher than products not producing emissions...
Meaning that it will make life even more expensive for us. Not sure if that's a good thing. Between inflation and rising interest rates we're already in a very bad spot.
I'm already feeling squeezed. I can't imagine how people are that don't have a good job. No wonder populist parties are doing so well.
The money we pay doesn't magically disappear, it goes to the state as revenue. We could use said revenue to do like a UBI or something to counteract the negative effects.
Why should developing countries share the externalities for products that you consume and use?
Maybe the market won't be able to solve these problems even with appropriate measures like those suggested here. Your argument seems to be, "it won't work so we shouldn't try because it will be worse for us" which doesn't seem convincing to me.
Electricity prices up all across Europe and instead of waiting for stabilization they just keep on piling stuff that will make Europeans even more poor.
Instead of focusing on China and India, which are the major polluters clearly shows that the EU lost the sight of the big picture.
>> The border tax will provide an incentive for other countries to model their own carbon prices after the EU emissions trading plan.
Yeah, no. India and China will just say "no thx" and what can EU do about it? Nothing.
The answer's right in front of you: the EU's imposing tariffs on goods exported from China into the EU. China is an export economy. This matters to them.
(I mean, if you want to argue that China is turning inward and its internal market will soon be the largest consumption market on the planet, sidelining the EU, I'll concede that. But in the near term, the EU market is a globally super-influential one. These policies are not irrelevant).
First, European voters may well decide that they don't care about carbon emissions that much; with every economic downturn, the green parties tend to lose votes and the far right gains.
Second, "reeducation by tariffs" will produce resentments that may bite us back. I can see the reverse happening later; e.g. India adding extra tariffs to its own products unless we accept Hindutva.
"If someone is stupid enough to do this, they don't need a reason."
Politicians love to play tit for tat, because that gives them a plausible excuse for the masses. And you may underestimate the weight that ideologically based states put on their official ideology.
IDK if it will be Hindutva and India, but we will likely see some Chinese attempts to enforce their own sensitivites. They already try to do so at universities which have a lot of Chinese students.
If I have whatever believed higher standards to something (be it carbon-free, worker protection, no child work, or whatever) but other's on the global market do not, and it makes things massively cheaper, I can only have tariffs or drop my standards (or not care about competitiveness of my industries). What other alternatives exist?
> The answer's right in front of you: the EU's imposing tariffs on goods exported from China into the EU. China is an export economy. This matters to them.
Not until there's a cheaper alternative. Until then they will not care, the life will be just more expensive for everyone in the EU.
EU states can use some or all of this revenue for a direct dividend to citizens, like in Canada. That would make most people better off than before, in direct financial terms.
So they will be taking money from citizens in form of taxes so they can give it back to those same citizens? Seems like a lot of time-wasting bureaucracy.
Suppose some item from China costs $100. Now EU will add, say, $15 tax to it, for the total price of $115. So, $100 is going to China, as previously, and $15 tax paid by EU citizens is redistributed among EU citizens. And no, do not expect Chinese companies to just eat the tax, because their profit margins are usually already thin, as they are competing on price in many markets.
This may change, eventually, if Europe finally learns to manufacture things themselves, but that's a long and hard way. For at least the next decade they will have no choice but eat the tax and continue buying from China.
> And no, do not expect Chinese companies to just eat the tax, because their profit margins are usually already thin, as they are competing on price in many markets.
That's the point. From the article:
> Under the new regime, an importer of Chinese steel will have to purchase carbon credits that correspond to the same rate as steel produced in the European Union.
Europe already produces this stuff, they're just being outcompeted by China subsidizing their costs using the environment. Since China and Europe happen to be share big parts of the environment, Europe feels environmental effects no matter where the steal is produced.
Yes, I am suggesting they were already paying for this (just not with money). I think the EU is too.
Or the “green alternatives” will become more expensive, because why the hell not? If your competitors just raised prices it makes it easier for you to do the same, without consequences.
> It's Förderung, not Forderung. Two totally different words.
You have umlauts on your keyboard, yay! Vielen Dank und viele Grüße.
> I guess the price spikes happen because demand spikes in these situations..
Seems like a lot of people, and the government, guess like you. Everyone's kinda bummed in Germany that Förderung becomes available, resellers jack prices up, Förderung ends up in the pocket of the reseller. Typical money grab. Viel Öko.
As the gov is already regulating the market, they can opt to regulate the price cap for something they fund anyway. No? Same with solar panels.
I mean, it's not like the government has their own money. People of Germany fund Förderung. So people fund it in taxes so they can get in Förderung so that a group of people gets rich on the wave of the Förderung. It would be okay if people weren't forced into this technology.
Oh, what would one give to be on the drawing board of the Klimawandel and have the first hand knowledge of what people are going to be strong-armed into. Sounds like a perfect condition to put oneself in a position to greatly benefit out of it.
This is a tax companies have to pay not China or India.
CBAM is literally intended for countries like China, as the article explains, companies buy cheaper steel from china because European steelmarket already pay a carbon tax.
There are a bunch of reasons this happened, including the war. But the main reason it hit EU so hard was because Bayern (among others) refused to allow planned green energy projects to start. Pretty much the same thing happened in Texas, with about thesame outcome.
> Instead of focusing on China and India, which are the major polluters clearly shows that the EU lost the sight of the big picture
Both China and India have minuscule per capita emissions when compared to the EU. The difference is more stark when accounting for emissions of exported goods, which are often consumed in the EU.
The problem isn’t the poor people on the other side of the planet.
India's per capita CO2 emissions per capita are around 24% of the EU's. I wouldn't call 24% minuscule but it is pretty significant so for India I'd score the claim as sort of correct.
China's per capita CO2 emissions per capita are around 97% of the EU's. If they were an EU country they would be comfortably in the middle of EU country emissions per capita, about halfway between France and Germany.
EU's total emissions are higher than India's total emissions.
Furthermore, the atmosphere is very good at mixing CO2, so a ton of CO2 has pretty much the same impact no matter who emits it.
Unless you can make a good case that some people have some sort of natural or divine right to live a higher emission lifestyle than other people, allocating emission allowances equally per country makes no sense. Otherwise per capita is the right measure.
If we want to hold emissions at current levels, that works out to around 4.5 tons per person per person per year.
The people of India are at 40% of that, China is at 160% of that, and the EU is at 170% of that. The US is at 340%.
Heard about a while back and super excited that it's implemented. One of the examples I remember is less polluting cement and steel. We know how to do it but it's marginally more expensive than "traditional" so companies producing it are on a small scale, mainly for "enthusiasts". Given this tax, the price for better steel/cement is going to be on par with the traditional and thus should incentives companies to buy it, thus reducing emissions in general.
Reduction is the first and main part. So what if in 15 years we'll have tech to clean, if by then we make irreversible and expensive damage.
The devil is in the details, and I for one fear the effect on prices that will ripple all the way down to the European consumer (they are sky-high already, and taxation is super high as well), but if it works, it works.
What I'm really curious about is how we are going to fix CO2 emissions from food[^1]. I believe we can decarbonize food production...at a huge political cost. Are we going to use the boil-the-frog technique for that as well? Will there be "meat protests" in France at some point?
Certainly this will ripple through to the customer? The goal of such a border tax for these is to make products within EU competitive again, which have these already priced in, vs external ones which can just not care and be cheap.
Always sad that this reasonable tax adaptions are not really in place for more things, e.g. the cost of worker protection here vs there.
40 comments
[ 2.8 ms ] story [ 23.8 ms ] threadI'm already feeling squeezed. I can't imagine how people are that don't have a good job. No wonder populist parties are doing so well.
Besides, these prices have always been there as external costs. You just never paid them. This needs to stop anyway.
And I don't believe in the market ever solving these problems even with the right incentives.
Maybe the market won't be able to solve these problems even with appropriate measures like those suggested here. Your argument seems to be, "it won't work so we shouldn't try because it will be worse for us" which doesn't seem convincing to me.
Instead of focusing on China and India, which are the major polluters clearly shows that the EU lost the sight of the big picture.
>> The border tax will provide an incentive for other countries to model their own carbon prices after the EU emissions trading plan.
Yeah, no. India and China will just say "no thx" and what can EU do about it? Nothing.
The answer's right in front of you: the EU's imposing tariffs on goods exported from China into the EU. China is an export economy. This matters to them.
(I mean, if you want to argue that China is turning inward and its internal market will soon be the largest consumption market on the planet, sidelining the EU, I'll concede that. But in the near term, the EU market is a globally super-influential one. These policies are not irrelevant).
First, European voters may well decide that they don't care about carbon emissions that much; with every economic downturn, the green parties tend to lose votes and the far right gains.
Second, "reeducation by tariffs" will produce resentments that may bite us back. I can see the reverse happening later; e.g. India adding extra tariffs to its own products unless we accept Hindutva.
This is tautology--of course it won't work if people don't want to do it anymore.
> India adding extra tariffs to its own products unless we accept Hindutva
If someone is stupid enough to do this, they don't need a reason.
Politicians love to play tit for tat, because that gives them a plausible excuse for the masses. And you may underestimate the weight that ideologically based states put on their official ideology.
IDK if it will be Hindutva and India, but we will likely see some Chinese attempts to enforce their own sensitivites. They already try to do so at universities which have a lot of Chinese students.
If I have whatever believed higher standards to something (be it carbon-free, worker protection, no child work, or whatever) but other's on the global market do not, and it makes things massively cheaper, I can only have tariffs or drop my standards (or not care about competitiveness of my industries). What other alternatives exist?
Not until there's a cheaper alternative. Until then they will not care, the life will be just more expensive for everyone in the EU.
Suppose some item from China costs $100. Now EU will add, say, $15 tax to it, for the total price of $115. So, $100 is going to China, as previously, and $15 tax paid by EU citizens is redistributed among EU citizens. And no, do not expect Chinese companies to just eat the tax, because their profit margins are usually already thin, as they are competing on price in many markets.
This may change, eventually, if Europe finally learns to manufacture things themselves, but that's a long and hard way. For at least the next decade they will have no choice but eat the tax and continue buying from China.
* EU product 115€
* China product 100€
After:
* EU product 115€
* China product 115€
So chinese product can't just outcompete on price. And the money may actually sty in the EU.
> And no, do not expect Chinese companies to just eat the tax, because their profit margins are usually already thin, as they are competing on price in many markets.
That's the point. From the article:
> Under the new regime, an importer of Chinese steel will have to purchase carbon credits that correspond to the same rate as steel produced in the European Union.
Europe already produces this stuff, they're just being outcompeted by China subsidizing their costs using the environment. Since China and Europe happen to be share big parts of the environment, Europe feels environmental effects no matter where the steal is produced.
Yes, I am suggesting they were already paying for this (just not with money). I think the EU is too.
Or if not. The tax helps pay for the negative externalities.
Forderung: demand, requirement Förderung: financial support (what you mean)
I guess the price spikes happen because demand spikes in these situations..
You have umlauts on your keyboard, yay! Vielen Dank und viele Grüße.
> I guess the price spikes happen because demand spikes in these situations..
Seems like a lot of people, and the government, guess like you. Everyone's kinda bummed in Germany that Förderung becomes available, resellers jack prices up, Förderung ends up in the pocket of the reseller. Typical money grab. Viel Öko.
As the gov is already regulating the market, they can opt to regulate the price cap for something they fund anyway. No? Same with solar panels.
I mean, it's not like the government has their own money. People of Germany fund Förderung. So people fund it in taxes so they can get in Förderung so that a group of people gets rich on the wave of the Förderung. It would be okay if people weren't forced into this technology.
Oh, what would one give to be on the drawing board of the Klimawandel and have the first hand knowledge of what people are going to be strong-armed into. Sounds like a perfect condition to put oneself in a position to greatly benefit out of it.
This is a tax companies have to pay not China or India.
CBAM is literally intended for countries like China, as the article explains, companies buy cheaper steel from china because European steelmarket already pay a carbon tax.
There are a bunch of reasons this happened, including the war. But the main reason it hit EU so hard was because Bayern (among others) refused to allow planned green energy projects to start. Pretty much the same thing happened in Texas, with about thesame outcome.
> Instead of focusing on China and India, which are the major polluters clearly shows that the EU lost the sight of the big picture
This is exactly how this will work!
The problem isn’t the poor people on the other side of the planet.
India's per capita CO2 emissions per capita are around 24% of the EU's. I wouldn't call 24% minuscule but it is pretty significant so for India I'd score the claim as sort of correct.
China's per capita CO2 emissions per capita are around 97% of the EU's. If they were an EU country they would be comfortably in the middle of EU country emissions per capita, about halfway between France and Germany.
This is focusing on China and India.
Furthermore, the atmosphere is very good at mixing CO2, so a ton of CO2 has pretty much the same impact no matter who emits it.
Unless you can make a good case that some people have some sort of natural or divine right to live a higher emission lifestyle than other people, allocating emission allowances equally per country makes no sense. Otherwise per capita is the right measure.
If we want to hold emissions at current levels, that works out to around 4.5 tons per person per person per year.
The people of India are at 40% of that, China is at 160% of that, and the EU is at 170% of that. The US is at 340%.
What I'm really curious about is how we are going to fix CO2 emissions from food[^1]. I believe we can decarbonize food production...at a huge political cost. Are we going to use the boil-the-frog technique for that as well? Will there be "meat protests" in France at some point?
[^1]: https://css.umich.edu/publications/factsheets/sustainability...
Always sad that this reasonable tax adaptions are not really in place for more things, e.g. the cost of worker protection here vs there.