You’ve Heard of Outsourced Jobs, but Outsourced Pollution? It’s Real, and Tough to Tally Up

I have always suspected this. So glad to finally see some reporting on this!

“If a country is meeting its climate goals by outsourcing emissions elsewhere, then we’re not making as much progress as we thought.” Indeed we're not, if any at all. The resistance to maintaining a livable planet for the grandchildren is discouragingly baffling. I always remember Rodney King's "Can't we all just get along?" responding to racial discrimination, and I wonder why we can't just take care of what we've got, be real stewards instead of destroyers. It seems so simple. And sane...

Outsourcing our carbon footprint to countries with little to no environmental protections which actually increases the size of our carbon footprint should be illegal. Oursourcing our jobs to countries with virtual slave labor and no human rights should also be illegal. Allowing our corporations to import goods made in such countries should be illegal. Voting to allow them to do so with lower tax rates should be political suicide. We all share the same oceans and atmosphere regardless which country we call home.

This is nothing new... one of the reasons manufacturing jobs left our country is that there was a time we regulated pollution and insisted that corporations adhere to those regulations. Voters bought into the de-regulation argument based on the paperwork that local and state governments insist on for mundane things like vehicle registration and the record keeping required to satisfy the IRS.... The "red tape" that manufacturers wanted to deregulate wasn't paperwork... it was the regulations that required corporations keep our water and air clean... Under the current administration we might be able to bring those jobs back home and with it the polluted air and water that we've outsourced...

The author's casual three sentence dismissal of the "global carbon tax" approach ("The Unlikely "Tax" Solution) is mischaracterized and unwarranted. The "exporting pollution" issue is well understood and there is a solution--a Border Carbon Adjustment. It is advocated by leading climate economists (see articles by Stiglitz, Nordhaus, Weitzman, Cooper, Perry et al. in "Global Carbon Pricing: The Path to Climate Cooperation"). These economists and many others have established that the "pollution export" problem can be readily addressed in a three part approach: a carbon fee on coal, oil and gas; rebates/dividends to all households to maintain support for the carbon tax policy (see Stern et al); and a Border Carbon Adjustment. The BCA is a tariff on the carbon content of imports which (a) keeps domestic industries on an even playing field and eliminates any incentive to "export their pollution" i.e., move production to countries without carbon fees; and (b) gives incentives to other countries ("free riders") to establish their own equivalent carbon fee so they won't have to pay the carbon tariff. The author may want to address this well known approach in the future instead of the complex, opaque regulatory/administrative measures heavy with discretion--characteristics to be avoided where possible (particularly in developing countries with weak institutions and serious corruption). (Harmonized national carbon taxes are doable--don't need a "global carbon tax".)

Buy Clean requirements will only lead the dirty steel to be shipped to other countries or states that do not have that requirement. As long as our economy is tied to exponential gdp growth, there will be space for all types of dirty and clean steel in the market. For example we first started burning wood for energy, but once we found coal we still kept burning wood. Now that we have clean solar panels we still burn dirty coal, wood, oil and cleaner forms such as natural gas. There will always be space for all forms of energy as long as the world needs to increase exponentially their economic output. California may require that only solar panels be used in their state, but that won't change global emissions because coal, wood, oil, and natural gas will be shipped to other states or countries that do not have those requirements.

"dealing with imported emissions remains a thorny problem." China's current emissions trading scheme has, built into it, costs of all inputs, foreign and domestic. The program will affect all of China’s trading partners, speeding the shift to clean, sustainable sources of power which, naturally, China will provide. Australia’s Peter Castellas says, “Our energy-intensive exports sit directly in the supply chain of the world’s largest carbon market. Their regulations on supply chain emissions mean that Australia–and all of China’s trading partners–will have to clean up our emissions because they even regulate and tax emissions that are generated outside the direct control of Chinese businesses”.

Such obfuscation & deception among the California delusional misappropriated corrupted cap-&-trade scam; mitigation is a myth, offsets a sham, indulgences unjust, ...

I guess we will have to buy more wind turbines and solar panels from China to compensate. That should help.

Glad to see this important topic getting more attention. An interesting aspect of this climate accounting problem is that doing more complete accounting of all supply chain pollution can actually help investors identify more efficiently run companies that generate higher investment returns. Etho Capital (ethocapital.com) has done a lot of research in this area, and their "climate efficiency" ETHO ETF has made substantially more money than stock market benchmarks and other sustainable and responsible investment funds.

Exporting of emissions is indeed real - and nowhere more so than within U.S. borders, where states increasingly bolster their green credentials by importing electricity from dubious sources over their borders. In California, many interpret the fact we import 30% of our electricity to mean we export 30% of our carbon emissions - though with regulation beyond our borders more lax than within, the percentage is certainly higher. Currently, a full third of electricity imports are listed as coming from “undetermined sources,” meaning we’re really not sure whether Wyoming is sending us electricity generated by the wind, the sun, or coal furnaces. State legislators recently sponsored a bill (AB 813) which would have made it official, by permitting Wyoming to decide what generates the exported electricity it makes available for sale in California’s wholesale electricity market. Though Warren Buffett’s Pacificorp attempted to portray AB-813 as an opportunity for renewables entrepreneurs to share their clean energy with that of other states, it was opposed by groups as diverse as Sierra Club and Californians for Green Nuclear Power, who recognized Pacificorp’s intent to foist their predominantly coal generation on unwitting Californians. Since 2005, when federal oversight of utility power generation effecively ended, it’s now incumbent upon residents of states to hold public utility commissions accountable - step #1.

Pollution outsourcing is not strictly an international phenomenon. China regularly shifts high polluting industries from the east to the less developed interior. The interior becomes responsible for dirty, low-value add components. China's approach so far most closely resembles something academics call "combined but distributed responsibility." The idea is similar to our current international efforts. Areas who pollute more are more responsible for cleaning up their act. The primary difference is the Chinese model is theoretically consumption based. The wealthy coasts consume more of the output of the interior's pollution so they are proportionally more responsible. The system gets a little weird because, again in theory, high consumption areas are supposed to generate wealth transfers to modernize high pollution areas but we haven't really seen that happen. Chinese public investments mostly seems to encourage everyone to pollute more for longer. Silk road anyone? In any event, we haven't had much luck scaling the policy into the international realm anyway. "Buy Clean" is an interesting alternative but you're essentially advocating a forced form of consumer sovereignty. If you buy here, you buy my way thus impacting the global market space. That might work. California would probably consume cleaner steel. I'm not sure what the impact you would have on the global though. You might just encourage China to dump capacity in less developed markets.