How Europe’s new carbon tax on imported goods will change global trade
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Still inefficient. Heat pumps with efficiency of 250-300% should be target. Much better to just use existing heat than produce it...
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the hypocrisy here. A number of you in favor of surgery have posts elsewhere complaining about hacking someone to death with a machete
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Well what are you doing on the internet Diogenes? Get rid of your phones and technology and go live on a farm like your grandfather did you hypocrite. Though he was addicted to the heat of the wooden stove too so you could probably go further and get rid of that too. You don't need a stove, just some blankets. Heck, probably not even that. Just find a warm cave near the farm and get a lot of mud, and you'll probably be cozy.
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True, but the fairer comparison is between local combustion being ~70% to ~90% efficient at heat capture, versus 150% efficiency from burning the same fuel in a powerplant that converts 1 unit of fuel into 0.5 units of electricity, and your heat pump turning that 0.5 units of electricity back into 1.5 units of heat.
And the electric solution can run on dirt cheap renewable power when that's available, further reducing the demand for fuel. Renewables are now cheaper per kWhr than buying fuel, as long you can use the renewable power on the schedule when it's generated.
I also rather like not having combustion processes running in the house where my family sleeps. I very nearly died from carbon monoxide poisoning a year or two ago when a brick fell in our chimney and the oil boiler ran with an oxygen starved flame, spilling CO laced fumes into the house. It never felt viscerally dangerous, just a bit smokey, but our Nest smoke alarm, which is what woke me up in the middle of the night, registered 400 ppm of CO, a level that's lethal in 4 hours. I'll never know the counter-factual, but that device may well have saved my life. My heat pump is incapable of generating carbon monoxide, and is arguably less likely to start a fire. It also doesn't create a risk of childhood asthma from low level indoor particulate pollution. Indoor combustion sucks.
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Sea, Air, Land transport has no Green option at either scale or lower cost. This legislation is to address a global issue by making the products available fewer in choice where they might not be a suitable substitute good. (This doesn't mean the laws aren't correct and the hope 20 years down the timeline is a much cleaner environment.)
The term you are looking for is "Disinflation", where the rate of increase is decreased over whatever period of time you wish. The only method for getting cheaper goods is lowering wages or the cost of health benefits (assuming they are produced by a company offering them!)
The sustainability of legislation of this nature is a population willing to either accept fewer options or to invest in substitute production. (hint, this is how trade wars begin... protectionism. In the case of Russia's agressive moves in Ukraine? Unfettered access to shipping and natural resources.)
Regulation absolutely has a place in shaping pricing, not price controls which is what you are inferring. But that's a Socialism vs Capitalism argument.
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It doesn’t reduce the products available for sale, it modestly increases the cost of products that are high emissions, but then it’s not end consumer behavior that is going to be responsible for the largest behavior changes; it’s all of the producers that have the opportunity to choose between two different materials or two different suppliers for the same material, as these manufacturers will be better equipped to make economically rational emissions reductions
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Its about competitiveness of EU goods and services within the EU.
Anything made inside the EU already needs to pay the EU carbon price, but until now goods made outside the EU only needed to adhere to their local jurisdictions approach (often nothing).
So this raises the cost of imports from high carbon economies, making low carbon EU or other goods more competitive.
So yes, it will raise prices at least a bit.
It won't make EU exports and less competitive, and might incentivise some producers to lower emissions in order to lower the tax paid.
We already have the prisoners dilemma you speak of, this legislation seeks to reduce the incentive to "cheat"
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There are a lot of ways to reduce the costs of goods apart from your two:
Increased productivity (better infrastructure, automation, efficiency)
Reduced taxes
Reduced profits
Somehow the last one is never mentioned
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I’m calling bullshit.
Sea? Sail power is a thing, and has been demonstrated to significantly reduce the fuel consumption of a container ship. With research, there’s a very real possibility that we could power ocean transportation using a combination of battery power and wind motive energy.
Land? Electrified rail. Trivial. Get long distance trucks off the road, replace them with trains, and then you’re left with the last mile problem (plenty of short haul electric trucks, which already exist.) The only reason this isn’t cheaper than road transportation is because road is substantially subsidised by governments, whilst rail is usually fully paid for by the business that owns it, creating perverse incentives.
Air transport is the only one that doesn’t currently have a good solution, but research is ongoing; it’s highly likely that building jet fuel from carbon extracted from the atmosphere will resolve this, though scaling up will be tricky.
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The US market may see some trickle down benefits as manufacturers clean up their business for the EU, and the US may get some of those clean goods as well.
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Well and also that literally kills trade. Like comparative advantage is a good thing and while people morally don't like the idea of low wage countries, but working in sweat shops for low wages is much much better than how things were in those countries prior to that. It may hurt our sensibilities but moving countries from subsistence farming to modern economics and quality of life usually means a low wage period, but that's still better than no wages or foreign investment.
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Funny enough this is basically the old guard Republicans from the 00s plan for a carbon tax. Tax carbon in the economy, let the market reduce it as a result, give every person a rebate equal to their percentage of the population. So the people who use the least (poor people) come out ahead as they consume much less than the wealthy but get the same check back every month.
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It is certainly not protectionism if the EU companies face the same carbon tax drag. Are the two regimes comparable?
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Europe also has carbon taxes for domestic production. This law is carob taxes for imports, presumably to level the playing field for the EU domestic market.
For exports, EU would be a competitive disadvantage in foreign markets if the EU charges carbon taxes on goods made for export. I don’t know what the law is on this part.
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so... tech where chips are made in us/wherever (sod knows where the raw stuff is from), shipped to taiwan to be packaged, then shipped to china or wherever to be assembled, then shipped out to eu to be sold.. what would be the charge?
i was looking at a lego box the other day from years back... it says... componemts made in china, india, mexico, czech republic and sod knows where else... how would that work?
i was looking at a lego box the other day from years back... it says... componemts made in china, india, mexico, czech republic and sod knows where else... how would that work?
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Another case where Chinese businesses have more chance of succeeding in the near future, compared to US businesses, due to the current administration’s regressive policies and actions?
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Oh yes, bad idea to let everyone use a wood stove. No need to explain that. I was trying to paint a picture of the man. Satisfied with little. That is all.
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My wife and I have too much money. Not sure where we are. Definitely not the 1%. Maybe in the top 20%? Combine that with not spending much and you have too much money.
No generational wealth. My grandfather had lots of kids. No inheritances yet. I started my life with 1500€ on my account.
Oh, that is a big difference. I struggled with serious health issues in 2015. I live in the EU. I was out for a year. Social security payed me a decent amount to keep going. Even in my little fantasy system, I would not scrap that.
Not donating much yet. When my life is coming to an end I will think of it.
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I have been advocating for precisely this mechanism for 20 years (!). It would have also been a perfect way to curb stomp China and Russia. Now it's too late. But better late than never.
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Right, so instead of being efficient in our resource usage we should just kill a few billion people so that a tiny percentage of the people left can have more stuff.
But I'm quite sure you'll "put your money where your mouth is" and be first in line at the gas chambers - or were you planning on saving society the labor costs and just killing yourself at home?
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::looks at his heat pump hot water system::
::looks at his 6 kW of solar panels::
::looks at the schedule for the heat pump, which is deliberately set up to run at a time of peak solar::
Yeah, nah.
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Probably faster to admit that in all countries in the world the wealthiest trend toward the dumbest in the planet or in a given economy precisely because of the bubbles they manage to create insulating them from the short and long term consequences of their actions (which they then use as a bully pulpit to manipulate the poor to their agendas against people slightly less wealthy than themselves and not quite in their social/income brackets)
This one simple realization would completely torch conservative politics in nearly every country on Earth however, so they are collectively fighting mightily against this pop cultural realization to this effect over time with propaganda and distraction.
They field enough armies of grievance cannon fodder to make the only way out right through both the aggrieved fodder and the billionaires themselves: straight to either taxing or looting the wealth bubbles and subsuming their families into un-bubbled lifestyles, willingly or not.
The latter is an inevitability, no one stays on top of the hill for long in a crab bucketing competition.
"Excess wealth rapidly makes you dumber than the dumbest fucking poor peasant intellectually and emotionally" is not a marketing campaign taking hold that conservative governments and political movements with economically corrosive racist and birthrate concerns to blunt human migration that the wealthy regularly themselves cause. If that ever took hold on a statistically significant global scale (the shorthand for this is ban billionaires) they would fight it tooth and nail, and frankly Trump, Elon Musk, the GOP's hangers-on, Putin, and the UK's politics are all forcing them to fight it already.
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The marginal price to produce medicine is significantly lower than what we pay in the US. In the EU medication only accounts for about 2% of gdp and food imports are .7% of gdp, mostly on luxury items. If the price of both doubled that'd be $650 per person per year. That's noticeable, but not catastrophic.
All of this assumes that the 3rd world will continue to have less clean emissions, when generally they've been switching to renewables faster given that they have less legacy infrastructure and solar is now the cheapest option.
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I think it will be exactly as you say. Most of us Europeans are willing to live a worse life in order to not give up our values. Well, at least until that actually happens. Then we'll complain.
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Few entities make economically rationale choices, let alone ones that potentially negatively affect longterm financial stability. And since this series of regulations boil down to trade dynamics, it's an Absolute vs Comparative Advantage discussion wrapped in opportunity costs for the producer. Since some products are specialized, there may not be an opportunity for a substitute good.
China/India specialize in cheap COG and have become economic forces as a result. They may continue to subsidize production to maintain dominance even in the face of higher EU regulation.
*This argument is playing out with the US Tariffs policies, on-shoring manufacturing and the net result has been increased good of goods (item variations obviously come into play). Imperfect Pass-through is continuing to play-out.
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It is a balance point. Even 25 years ago, things were generally relatively more expensive, but also better quality. Go back to the 1970s, and you had far less STUFF but still a good standard of living in general, in some ways better than today as lower relative costs of labor made things like housing more affordable.
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What is important is relative prices - make goods more expensive relative to labor/services = better to repair things and consume services rather than goods. Which is arguably more environmentally friendly - enjoying a show, concert, or getting a hair cut is a much better way to spend money than buying Chinese-made c**p from "it is cheap!" online retailers.
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My original comment is about the availablity of current tech, not ones in the pipeline. Research costs get passed on.
Carbon credits are an example of a preverse incentive. The EU tried this for certain chemicals only to experience companies overproducing to collect the cash equivilent. Some of the policies rewarded behavior due to the benefit outweighing the cost.
Governments of countries negatively impacted will opt to subsidize rather than invest in Clean Technology in order to maintain their competitive advantage. (At least until a substitute good is local, which again requires investment.)
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Yet that’s notable both because WV was the exception, and also because when caught they were held accountable.
Sounds like a system that’s working as intended to me.
Yes, there will be plenty of opportunity to game this system initially, but that can’t be done indefinitely. If only because those who do comply have an incentive for ensuring those who don’t are held to account.
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