Climate Action: Another Victim of the U.S.-China Trade War

By Michael DeLeers

The United States-China trade war has been a constant headline for the past few months. This makes sense considering the United States and China are the world’s two largest economies, and the tariffs they impose on one another have ramifications across the globe. One victim of the trade war has gone unmentioned, however: climate change policy. 

Germany recently announced a 60 billion dollar package of climate policies meant to reduce its greenhouse emission levels by 2030; specifically, Germany wants to drop its emission levels to 55% of those in the 1990s. This was announced after the September United Nations Climate Summit and made headlines after 16-year-old climate activist Greta Thunberg’s excoriated world leaders for their failure to implement effective climate policy.

Even with the publicity, both Germany’s announcement and the climate summit as a whole seemed lackluster. The summit brought no new climate action. Additionally, Germany’s new pledge only came after its initial failure to reach 40% of its 1990s level by 2020, a goal that would’ve reduced CO2 emissions by around 62-78 million tons.

The reluctance of countries like Germany to make lofty promises in climate policy seems to be, at least in part, a result of global economic uncertainty. It seems likely, then, that if the United States-Chinese trade war continues to negatively affect the world economy, many countries will avoid implementing climate policy for the sake of their economic output. Moreover, the United States and China have both slowed their responses to climate change, which will only further de-incentivize other countries to do the same.

The cost of addressing climate change seems to be an influence on the United States’ relationship with climate change. Implementing climate change policy is expensive and making economic sacrifices for something seemingly in the future, albeit in the near future, is understandable. However, taking into account that 2014 through 2019 have been the hottest years on record, the lack of U.S. initiative on climate change is worrisome.

Even more worrisome is that the United States has gone in the opposite direction on some occasions by issuing several cutbacks, including plans to cut some regulations on methane emissions, to keep coal plants open longer, and even to restrict California’s ability to make stricter emission guidelines than those of the federal government. In the United States, these changes seem to be an attempt by President Trump to save money for the oil industries and keep them competitive.

In the context of the U.S.-China trade war, these changes look like an effort to gain an economic edge. U.S. President Donald Trump, for instance, noted that the United States has the world’s largest energy sector and he would not risk U.S. wealth “on dreams [and] windmills, which frankly aren’t working too well”. It seems China acknowledges this sentiment as well when it noted at the UN Climate Summit that it would not be making more climate pledges. China is no longer actively attempting to develop its existing climate policies, through which it is already complying with the Paris Climate Accords. And considering the United States has pledged to leave the Paris Agreement and continues to roll back other policies, it is unlikely that China has any economic incentive to develop climate change policy in the future.

In this light, if the United States continues to value economic advantages over climate policy, other countries may start to follow suit; China being one. This is even more problematic considering that the United States and China are the world’s two biggest greenhouse gas emitters. If they do not promote change, any kind of climate change efforts will be impotent even if all other countries do their part.

This problem is only exacerbated by the economic power of these two countries. The head of the International Monetary Fund, for instance, noted that the U.S.-China Trade War could cost the global economy $700 billion by 2020. This impact could hurt smaller countries attempting to make climate change like Canada, which has one of the most extensive carbon pricing programs. 

Canada has a nationwide tax on coal, gas, and oil, except in the steel and chemical industries, which have lesser regulations because they are generally more competitive. The decision to keep steel and chemical companies exempt speaks to the core of the problem. If Canada continues to regulate its manufacturing sectors while other countries do not, especially the largest emitters, it loses economic competitiveness while making a relatively insignificant change on the climate. China, for instance, is the world’s largest steel provider. If it was to cut regulations on its steel industries to stay competitive in that industry, Canada might have to change its policy direction. 

In sum, if the United States wants to continue its economic trade war with China, it should consider the widespread ramifications of its decisions on climate action. If the trade war continues to destabilize the global economy, more countries may become less inclined to plant the seeds for change. In this light, the United States should reconsider the advantages of prolonging a trade war that has wide-ranging ramifications that stretch far beyond just two countries.

Photo courtesy of Joe Brusky (Flickr).

Leave a Reply

Your email address will not be published. Required fields are marked *