In the pre Bonn and Copenhagen talks, China is demanding developed nations cut their CO2 emissions by 40 per cent.
While Lord Stern's recent comments on a potential deadlock may be valid, he failed to take into account the issue of dealing with the end users and beneficiaries of the products contributing to CO2 emissions.
How do we define these and apportion the cost?
These originate from outsourced or relocated manufacturing operations in foreign countries designed to exploit cheap labour, poor working conditions, lax environmental safeguards, and various incentives. Politics and industry interpret it as a positive means of driving strong consumer economies with affordable products and growing the economies of developing nations.
While this may seem a fair and reasonable argument, there is a need to consider balancing the considerable benefits derived by the host nation, the outsourcing corporation and the consumer against the related CO2 emission content from the raw materials, manufacturing process, and transportation.
This is not a simple one-way street where the consumer carries the full cost of emission cuts to reduce CO2. Such a basic concept lacks balance and ignores key issues.
A country that hosts outsourcing manufacturing facilities also consumes those goods. The same country also produces a vast array of goods for domestic consumption with a high CO2 related content as well as producing the energy and processing the raw materials used in the goods. It is also responsible for the emissions.
That same country is also a major beneficiary, both directly and indirectly.
If considering carbon taxes or caps as a remedy to reduce global warming, then apportionment must include multiple factors.
Let us consider China as an example.
China's demand for the 40 per cent CO2 cuts by developed nations naturally excludes China, claiming developing nation status.
In presenting its case, China chooses to ignore the handsome rewards and benefits that it has gained. It claims that as its undeniable right. These range from massive foreign direct investment and technological advancement. This in turn created immense employment opportunities from the factory floor upwards, including the full spectrum of employment, skills bases, and cutting-edge technology.
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