Green Tariff Legislation Not Supported by Obama

President Obama announced this weekend that he would not seek trade penalties against countries that fail to cut greenhouse gases. Believing there are other ways to impose US will than through the use of tariffs, at least in this case, the New York Times and Washington Post reported Obama as saying, "At a time when the economy worldwide is still deep in recession and we've seen a significant drop in global trade, I think we have to be very careful about sending any protectionist signals."

The President, who supported the recent passage of HR 2454 in the House of Representatives on Friday, did not get tied up in the legislative details within the climate change bill. Known as the American Clean Energy and Security Act (ACES), the bill fell under heavy attack from Republicans who thought the bill would create an enormous tax burden, and others who felt the bill did not go far enough. Its narrow margin of 219-212 was a solid victory for the President who was now eying the Senate to pass it quickly as well.

Still, the President is likely to receive criticism for his reluctance to create tariffs against countries who aren't in the process of reducing Carbon emissions at an appreciable level. Professor Paul Krugman of Princeton University, a well-known economist who won the Nobel Memorial Prize in Economic Sciences and wrote The Conscience of a Liberal, was one of the President's critics today. Saying he believed the President was wrong not to impose such tariffs, Krugman explained, "the non-economic objective is to reduce greenhouse gas emissions, never mind their source. If you only impose restrictions on greenhouse gas emissions from domestic sources, you give consumers no incentive to avoid purchasing products that cause emissions in other countries."

Another viewpoint is that manufacturing jobs are more likely to move abroad by the increase of operating costs; something that might be curtailed with a tariff on imports that don't pass the CO2 emissions test. Still, many, like Senator Charles Grassley (R-Iowa), who spoke with ABC's This Week, claim that if this bill passes the Senate, "You're going to find signs on manufacturing doors...that say, 'Moved, gone to China.'"

There is likely strong pressure from various interest groups not to pass green-tariff legislation as well. Domestically based companies, for example, that have plants and operations abroad and thereby enjoy major cost savings by not having to pay more costly American workers. Under a green-tariff condition, it is possible that their own imports might lose them their competitive edge. Creating further hesitation on Capitol Hill is the international arena. Nations like China and India, some fear, might retaliate by entering into a trade war with the United states should the US opt for green tariffs.

With the President's mention of his resistance to green tariffs, some legislators, who claim such tariffs will, nonetheless, help to protect major industries, as well as others who think it's just plain the right thing to do in terms of the environment, are looking to pressure fellow members to include the provisions that will ensure Obama does not get his way on this specific point. Ultimately, the political map is more complex when it comes to this one selling point. Furthermore, Krugman's argument begs the question whether the United States is more concerned with controlling its own emissions or whether it is most interested in pressuring the world to control emissions for the sake of the planet. If you believe global warming comes, in part from CO2 emissions, the obvious conclusion would lead one to think the benefits of leveraging your own economy against other countries' emissions makes for a realistic option. Of course, the political scene is extremely complex and compromise is often the name of the game when it comes to the passage of any bill. How the Senate will shape the bill remains to be seen, but the passage of the bill is one step closer to occurring after passing the House on Friday.