It comes down to the simple question of whether the consumer or producer pays for the pollution caused by the production. If American consumers did not demand the product the pollution would not exist. Then we have the fact that a lot of the production in China is produced by US owned firms.
The US regulatory framework is flawed.
U.S. Should Pay for Carbon Content of Imported Goods: Locke [PlanetArk]
SHANGHAI - To address the serious threat of global warming, Americans should be required to "pay" for the carbon content of goods they consume from countries around the world, a top U.S. official said on Friday.
"It's important that those who consume the products being made all around the world to the benefit of America -- and it's our own consumption activity that's causing the emission of greenhouse gases, then quite frankly Americans need to pay for that," Commerce Secretary Gary Locke told the American Chamber of Commerce in Shanghai.
Locke spoke to the business group after meetings this week with Chinese Premier Wen Jiabao and other officials on how the two countries could work together to reduce carbon dioxide and other greenhouse gas emissions blamed for global warming.
Unless China, the United States and other countries begin to reduce output of the heat-trapping gases, the world faces a "catastrophe" in the form of more frequent floods, droughts and rising sea levels, Locke said.
The U.S. House of Representatives has passed legislation that creates a market for companies to trade permits to emit greenhouse gases, which would be capped at a certain level and then reduced over time.
The bill also contains "carbon tariffs" that would allow the United States to slap duties on imports of carbon-intensive goods such as steel, cement, paper and glass from countries that have not taken steps to reduce their own emissions.
Locke said Chinese officials raised concern about those provisions this week.
"They feel in essence it's a tax on their carbon activity," he said.
China has recently surpassed the United States as the world's largest emitter of greenhouse gases. Its emissions come largely from production of steel, cement, aluminum, paper and chemicals, most of which are consumed in China rather than exported.
In contrast, U.S. greenhouse gas emissions come mainly from domestic consumption, such as fuels to heat and cool buildings and to power vehicles. Only about 25 percent of U.S. emissions are caused by factories.
Though U.S. President Barack Obama has expressed concern about the House "carbon tariffs," Locke said it was an open question whether he opposed them or not.
"The president has not taken a position on any particular element of the legislation," Locke said.
"It's simply premature to talk about individual pieces of the legislation without seeing it in it's totality," Locke said, noting the Senate still has to pass its version of the bill.
Once that happens and negotiations begin between the House and the Senate, the administration will weigh in more heavily on various elements of the bill, Locke said.