Saturday, May 16, 2009

Krugman on China and pollution

The article is titled 'Empire of Carbon'. What I realize is that the Stiglitz idea which I had mentioned in class (and which I even think is written in that little purple book) that the rest of the world imposes a tariff on the US to force it to do something for the climate is picked up by Krugman. He proposes 'shoppers who buy Chinese products should pay a “carbon tariff” that reflects the emissions associated with those goods’ production'.

The article is here.

PS: Just checked that little book and here is what is written in one of those 'tips' boxes':
An interesting solution proposed by Nobel laureate Joseph Stiglitz is to consider the firms of such nations (as the US) as recipients of state subsidies. Not paying the full costs of production is equivalent to receiving a state subsidy. Since subsidies within the WTO trade system are illegal, other nations would have the right to impose trade sanctions on these nations, forcing them to cooperate and reduce emissions.

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