The way I see it, the major barrier to countries implementing carbon taxes is the fear their economic competitors won’t do the same, therefore hindering their economic growth needlessly. A valid concern.
Why don’t some nations build an ‘opt in’ style Free Trade Agreement that allows any country to join as long as they prove they have implemented and enforced a carbon tax. Those countries then have high financial incentives to only trade within the ‘carbon tax block’ and any country outside is at a serious trade disadvantage.
I’ve (quickly) looked and have not found anything like this proposed (which is frankly crazy).
Would you support your country jumping into this FTA?
What are the unforeseen downsides or objections to a plan like this?
You wouldn’t get to pick ‘which nations’. What I’m describing would be a blanket statement: If you implement a carbon tax you can sign into this Free Trade Agreement club. Any nation in that club automatically has the same FTA with every other country.
“A Free Trade Agreement isn’t something universally good.” - Totally agree, but I think we can also agree that it would create an incentive for countries within the agreement to trade more with each other than with outsiders. It would also provide an incentive for the outside countries to join the club (specifically after it has reached some critical mass).
Industries within countries could definitely be negatively effected because of the FTA. I get that. All industry will be negatively effected if climate change isn’t curbed though. This seems like a way to make a tangible policy today that builds economic incentives for a carbon free future. It does not require full world ‘sign off’ before you start. It can start with just two countries drafting this open-invite FTA and allow any other country into the club once they’ve proven they have a carbon tax.
Would need a few more stipulations than just a carbon tax.
Labor rights would be important too. One country that uses slave labor to build stuff, and dumps toxic waste into the ocean, but just tacks on a few $ in carbon tax for their big carbon belching systems still wouldn’t be good for anyone.
Probably would be ok with a general human and nature rights treaty, where there is free trade as long as the overall impact of the economy in all aspects is at least neutral.
overall effect at least neutral
You realize this is a very difficult thing to determine right?
Of course it is, but if the goal is fixing the planet, you can’t just say “carbon tax” and be done with it, because there’s many other things that are screwing up the planet, and a carbon tax itself just raises the cost of polluting, so if the rest of the manufacturing chain is cheap enough due to everything else having no protection, than a carbon tax isn’t a solution at all.
Free trade with a country that has limited environmental protections just off-shores the environmental impact to another part of the world, which invariably screws up the entire planet. Any sort of unfettered free trade must have very strong societal and environmental guarantees.
Our generation can’t fix all of the problems with the world, as much as many of us would like to. What we can try to do is give future generations the opportunity to fix what we can’t - but that requires us taking action on the climate today at the cost of our other ambitions.
I agree. The goal is fixing the planet. There are loads of problems that need fixing. Unfortunately, we need to start considering the cost of inaction. If adding some societal guarantee reduces participation in a carbon tax that is a cost the whole world has to pay in the future. If too many restrictions are added there may be no change from the status quo.
I am frustrated by the myriad of lofty goals that go nowhere. We needed action on those lofty goals yesterday. We are more desperate for it today and have to pay for that with compromises.
IMO climate is not going to be solved without a world government that has jurisdiction over all of Earth.
That is a political nightmare for other reasons, but it’s necessary to solve the incentive problems around this.
Without authoritarian enforcement, it’s just not going to happen because of the whole tragedy of the commons thing.
I’m not saying that should happen. I think that when considering a single planetary government with today’s climate, versus a multipolar planetary political system with the climate predicted by the IPCC if we don’t stop climate change, the single world government is worse for humanity.
Unless there are parts of human civilization that aren’t on Earth. A single government with jurisdiction over all humanity is a serious problem. By the time we have multiple worlds, single world governments won’t be as much of a nightmare.
Then we can solve climate change. But MAD will be disrupted. Which is its own problem.
Well the idea of a carbon tax, in the context of effects which are difficult to determine, is that it is simple and specifically does not attempt to determine those effects. It relies on the assumption that less carbon release is better, and after that, all the determinations about what specifically can be changed to reduce carbon usage is handled by the distributed decision mechanism of the market.
The difficulty in evaluating these effects isn’t just an obstacle to be overcome, but a design reality that determines the shape of a solution.
Specifically, it means the potential solution should not include that evaluation happening inside the government. That evaluation should be done by the more inclusive and thorough mechanisms of market interaction, rather than the shallow and cursory mechanisms of committee meetings.
I guess this might be an incentive for some developing nations.
But FTA agreements also come with a lot of strings attachted.
For example, I would not want an FTA agreement with the US, regardless. They usually require the partner nations to enforce US copyright law. Also we already have higher consumer product standards and I doubt the US will raise theirs to comply.