India won't play nice

An article by Rama Lakshmi in the Washington Post is a reminder that despite the increasing concern about global warming and carbon emissions, developing nations still want to develop without constraint. Put pretty succinctly by one of the Indian delegates to a recent UN conference, "It is morally wrong for us to agree to reduce [carbon emissions] when 40 percent of Indians do not have access to electricity."

The article goes on to say, "Last week, India's special envoy on climate change, Shyam Saran, told reporters in Bonn that he opposed any attempt by the European Union and the United States to impose 'carbon tariffs' on exports of Indian goods produced in energy-intensive industries such as steel, aluminum, cement and fertilizer." It also says that India doesn't think it is fair to be targeted for its emissions because per capita India emits 1/10 of what the US does.

The problem, clearly, is that the population of India is over 1 billion people, and growing. A second problem is that the climate system just doesn't care about the population; the temperature rises in direct proportion to the amount of carbon dioxide in the atmosphere, without dividing by the number of humans who put it there.

There are tricky ethical issues here, and there is no absolutely right answer. India does deserve to continue to develop, bringing the standard of living up for its citizens. India must take responsibility for its contribution to global warming, which threatens the standard of living for just as many people around the world (through changes in precipitation, sea-level, ecosystem response, melting of permafrost, changing migratory patterns, etc).

What can the UN or the United States do to spur India to action, to make a real effort to reduce CO2 emissions? Well, not a whole lot for now. However, going back to Shyam Saran's comment above, I see no reason not to impose carbon tariffs in the near future. This will depend on the adoption of some kind of carbon pricing mechanism (e.g., "cap and trade"). Once a price is placed on carbon use, then it will have to be applied to imports as well, including the amount of energy that goes into transporting material goods.

From my simple viewpoint, which might be naive, it seems like there would absolutely have to be such tariffs. Otherwise, it would become even cheaper to outsource jobs to developing countries. This includes non-manufacturing. Already it is very cheap for companies in the US (and elsewhere) to hire Indian companies to do a lot of work (see e.g., The World is Flat
). If energy costs were to rise substantially in the US because of the price of carbon emissions, without a commensurate rise in price of outsourcing, then there would be little choice left other than to send those jobs overseas, which would be a severe blow to the local economy. So a carbon pricing system imposed, say, on American companies would necessarily include the carbon emitted by their contractors, provided that the contractors are not already paying for those emissions. The job of tracking all the emissions and who pays for what seems gargantuan and nearly intractable. In the end, the whole goal of the system would be to get enough people paying enough money that large-scale shifts in energy generation would ensue, eventually eliminating the need for burning fossil fuels. But the path is tortuous, even if paved with good intentions.