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Not only does the logic show that carbon taxes in the West will invariably increase global CO2 emissions, but so does the empirical evidence.
To begin with, data from the World Bank reveals that China, and other developing countries, produce far more carbon per dollar of economic output (at purchasing power parity) than do Western nations. For example, China produced 0.6 kilograms of carbon dioxide per dollar of economic output in 2014, whereas America produced 0.3 kg of CO2, and Germany produced just 0.2 kg. On top of this, China shows no signs of decreasing its emissions any time soon: China’s currently building hundreds of new coal-fired power plants, which will ensure its CO2 emissions continue to rise for decades to come.
Taken together, these facts suggest that every factory pushed out of the West due to carbon taxes actually increases global emissions dramatically, and this will continue to be the case for decades to come. A number of other studies came to the same conclusion.
One important paper published in Proceedings of the National Academy of Sciences, found that carbon reductions alleged to the Kyoto Protocol were more than offset by increase emissions from imported products. Glen Peters of the Centre for International Climate and Environmental Research said this of the research:
Our study shows for the first time that emissions from increased production of internationally traded products have more than offset the emissions reductions achieved under the Kyoto Protocol … this suggests that the current focus on territorial emissions in a subset of countries may be ineffective at reducing global emissions without some mechanisms to monitor and report emissions from the production of imported goods and services.
Essentially, local carbon taxes are not a useful tool for mitigating a nation’s carbon footprint. If anything they actually raise global emissions. The paper also notes that China accounts for some 75 percent of the developed world’s offshored emissions.
Another study published in The Guardian, found that “50 percent of the rise in Chinese emissions are the result of goods for foreign markets.” This was echoed in a different study from the scientific journalGeophysical Research Letters, which found that cuts in carbon emissions by developed countries have been cancelled out “many times over” by increases in imported goods from developing countries—especially China.
Another study found that all of the trumpeted carbon reductions in places like Germany fall apart under closer scrutiny:
According to standard date, developed countries can claim to have reduced their collective emissions by almost 2% between 1990 and 2008. But once the carbon cost of imports have been added to each country, and exports subtracted—the true change has been an increase of 7%. If Russia and Ukraine—which cut their CO2 emissions rapidly in the 1990s due to economic collapse—are excluded, the rise is 12%.
These studies conclusively show that the offshoring of Western industry to China has actually increased global carbon emissions. It is unreasonable to assume that a carbon tax, which will further increase the incentive for business owners to offshore, will magically reduce global carbon emissions. There is no silver bullet. Carbon taxes are a pipe dream.