Tag Archives: adjustment

A tangle of carbon taxes

A big storm on the hori­zon… get ready for it

Bor­der tax adjust­ments (‘car­bon tar­iffs’) are inevitable once manda­to­ry car­bon tax­es or emis­sion caps with mar­ket val­ue are applied to pro­duc­tion. Now, the Oba­ma admin­is­tra­tion acknowl­edges that:

Mr. Chu, speak­ing before a House sci­ence pan­el, said estab­lish­ing a car­bon tar­iff would help ‘lev­el the play­ing field’ if oth­er coun­tries haven’t imposed green­house-gas-reduc­tion man­dates sim­i­lar to the one Pres­i­dent Barack Oba­ma plans to imple­ment over the next cou­ple of years. It is the first time the Oba­ma admin­is­tra­tion has made pub­lic its view on the issue” Extract from Wall St Jour­nal

The bor­der adjust­ment of tax­es by means of a ‘car­bon tar­iff’ is not a prob­lem in itself. Bor­der adjust­ments for VAT and con­sump­tion tax­es are a long­stand­ing GATT/WTO sys­tem that has been un-con­tro­ver­sial since the 1970s. The biggest prob­lem is a polit­i­cal prob­lem posed by inter­na­tion­al legal con­cepts of equi­ty and respon­si­bil­i­ty that are bound to cause bit­ter con­flict between gov­ern­ments long before any sys­tem of ‘car­bon tar­iffs’ is put in place.

Automobile tariff cut irrelevant

Trade-weighted index australian dollar 2008

Why it’s impos­si­ble to get too excit­ed about the planned cut in auto­mo­bile tar­iffs from 10% to 5% in 2010. Despite the howls of cap­i­tal and the unions, the volatil­i­ty of the Aus­tralian exchange rate makes a 5% mar­gin irrel­e­vant. Already in 2008 the trade-weight­ed index has fall­en more than 7 per­cent. Click the thumb­nail for a larg­er image.


EC-China textile ‘circus’

Two high­ly expe­ri­enced ana­lysts nail the prob­lem with the pos­si­ble EC-Chi­­na agree­ment on the ‘tem­po­rary’ quo­tas imposed by the Euro­pean Com­mu­ni­ties on com­pet­i­tive gar­ment imports. The non­sense about ‘tem­po­rary’ quo­tas and indus­try adjust­ment that nev­er takes place has been going on for forty years. Joe Fran­cois and Dean Spinanger point out that we should all […]