Copenhagen has failed and American workers should heave a sigh of relief. Not because global warming does not have any scientific basis we don’t have the evidence to refute or support the proposition that man-made emissions are impacting global temperatures, we have our doubts and hunches but truthfully they are nothing more. No the reason American workers should heave a sigh of relief is because signing up to Copenhagen would have obliged the administration to push for a European style Cap & Trade scheme at home and Europe has shown that is simply a transfer of wealth from the developed to the developing world. It aims to reduce carbon emissions in the west (though that is debatable) and increases them in the east.
The example of Corus’ Redcar plant is a case in point. The plant was closed because key clients reneged on long term contracts and the 3m ton facility was left without enough sales to cover its costs. European steel producers receive about 2 tons of carbon credits for every ton of steel produced. Closure of Redcar will mean Corus will reduce its carbon emission by the equivalent of 6m tons of carbon emissions. But Tata, Corus’s owners, are rapidly expanding steel production in India where it could receive hundreds of millions of dollars annually from the Clean Development Fund by building new plants that are less polluting than existing Indian plants (not less polluting than Redcar you understand, just less polluting than older plants in India). As we have written recently elsewhere, the Indian steel industry is set to more than double production to some 124 million tons a year by 2011-2012. Even environmentalists must see this is a disaster for the reduction of carbon emissions. It merely transfers production from western steel mills where steel is produced in a carbon constrained environment to a non constrained market India and China understand this, that is why they will not sign up to a Copenhagen accord.
As a Wall Street Journal article puts it, Cap and Trade is a scheme that would impose heavy carbon taxes and allowances on U.S. industries, which would then have an incentive to move overseas themselves, or to sell those allowances to overseas companies that could use them to become more competitive against U.S. companies. Like the 1,700 Brits at Redcar, American workers would be the big losers.