@ Supply Chain Management


Carbon Emission Caps and Leverage

This is a story coming out of India – out of US Sec of State Hillary Clinton’s visit to India : India to Resist U.S. Pressure on Carbon Emission Caps.

India will resist pressure from the Obama administration to accept legally binding caps on its carbon emissions, the South Asian nation’s environment minister told visiting Secretary of State Hillary Clinton.

“There is simply no case for the pressure that we, who have been among the lowest emissions per capita, face to actually reduce emissions,” Jairam Ramesh said at a meeting today with Clinton in Gurgaon near New Delhi, according to a statement he issued to reporters. “And as if this pressure was not enough, we also face the threat of carbon tariffs on our exports to countries such as yours.”

Clinton is on a state visit to India meant to showcase trade and security ties and seek common ground on climate change and arms control. India has said it will reject any new treaty to limit global warming that makes it reduce emissions because that will undermine the country’s energy consumption, transportation and food security.

The climate-change bill that passed the U.S. House on June 26 calls for carbon-based tariffs if countries like China and India don’t adopt their own greenhouse gas controls by 2020. The U.S. said its push for higher environmental standards is not aimed at limiting the economic progress of nations, including India.


“Legally binding” emissions targets won’t be acceptable for India, Ramesh said. “It’s going to be impossible to sell in our democratic system.”

Clinton said she is confident that the U.S. and India can devise a plan that changes the way energy is produced, consumed and conserved, helping to create additional investments and jobs. The two countries must also expand the use of renewable energy in India, especially for rural electrification.

Well, that’s one down. And the remaining player for large scale emissions out of a developing country is China – one country that has significant leverage over the US by way of financing its debt. I’d think that the only thing that one would hear out of the US Sec of State along this line in China is a short peep.

Now, harken back to the expectation set by the retail consultant in the earlier post:

"Suppliers are going to have to absorb the cost increases," retail industry consultant Burt P Flickinger III said Wednesday.

Just what is this expectation based on?

Mentioned in the above news item is a provision in the climate-change bill that calls for carbon-based tariffs on countries like China and India that don’t adopt greenhouse gas controls by 2020. Well, we’ve got till about 2020 to return to growth over here or junk the over-the-top sanctimoniousness of the climate-change bill because the last time that tariffs were raised during a sustained contraction, the resultant was not a pretty sight.

Besides, destroying the planet is an equal opportunity thing – destroying one’s economy is a national choice.

About me

I am Chris Jacob Abraham and I live, work and blog from Newburgh, New York. I work for IBM as a Senior consultant in the Fab PowerOps group that works around the issue of detailed Fab (semiconductor fab) level scheduling on a continual basis. My erstwhile company ILOG was recently acquired by IBM and I've joined the Industry Solutions Group there.

@ SCM Clustrmap

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July 2009