by Tan Copsey
Those following closely will have noticed that the news from Nairobi is not particularly encouraging. I, like others, harboured the vaguest of hopes that the international community would use this unprecedented moment of climate awareness to forge on and agree the basis of deeper, more effective forms of cooperation. I longed for the creation of a new and better agreement that could be phased in as the first Kyoto commitment period ended. Instead the small rays of hope that have emerged from Nairobi are in fact to be found in exciting new international disagreements. France has proposed that climate laggards who have either withdrawn from Kyoto – read the US and Australia, or are manifestly failing to take serious action to meet their targets – hello Canada- should face new European taxes on their imports.
Whilst there is a certain irony about the fact that this proposal emanated from France – not exactly always the most environmentally friendly country in the world, as the Australian Daily Telegraph pointed out in a restrained and understated fashion (see below), the proposal itself may point to a new way forward.
Whilst obvious questions have been raised about the compatibility of any new taxes with existing WTO rules, I do not view such taxes to be fundamentally incompatible with free trade. Rather they could signal a re-assessment and potential re-conceptualisation of ‘free trade’, on the basis of internalising environmental externalities. Free trade would occur where carbon subsidies were removed. Countries like the US, Australia and Canada would then be in violation of WTO rules if they did not take steps to factor in the price of carbon. Makes you think doesn’t it?
