Published in Real Clear Energy
During the first presidential debate, Hillary Clinton accused Donald Trump of thinking “climate change is a hoax perpetrated by the Chinese.” The real estate mogul denied ever making the statement.
Referencing a 2012 tweet from Trump, Clinton surrogates and environmental activists quickly unleashed a storm of ridicule, smugly asking whether Trump actually believes climate change was something dreamed up in Beijing.
On its face, the comment attributed to Trump certainly seems absurd. However, Clinton mischaracterized Trump’s position when she paraphrased his tweet during the debate. He actually wrote that “the concept of global warming was created by and for the Chinese in order to make U.S. manufacturing non-competitive.”
Conspiracy theories abound in the world of climate politics. Developing countries frequently claim that the carbon agenda is a Western plot designed to prevent industrialization and trade competition.
Environmentalists argue that U.S. oil interests are working to undermine climate policy to avoid unwanted competition from wind and solar projects that generate fossil-fuel-less electricity. In reality, though, little oil is used to generate electricity in the United States.
But whether or not Trump believes that climate change is a hoax is a distraction from the real point of his November 2012 tweet.
Trump also wrote that “The Chinese will benefit from an international climate agenda that undermines U.S. competitiveness in manufacturing.”
China in all likelihood will gain a competitive edge on the U.S. manufacturing sector under the terms of the Paris climate agreement – a deal supported by Hillary Clinton.
As part of that deal, Beijing promised to peak its emissions sometime around the year 2030. Unlike the United States, China is not required to make actual cuts in its greenhouse gases emissions or regulate its manufacturing sector to meet its Paris pledge. In 2014, China accounted for 30 percent of global emissions, dwarfing America’s share of 15 percent.
Environmentalists dismiss these concerns, pointing to structural changes in China’s economy that are already slowing carbon emissions. From the beginning of 2012 to the end of 2014, China’s annual coal consumption grew only an average of about 1 percent. Beijing has also promised to impose a nationwide cap-and-trade next year, which would first control emissions from coal-fired power plants.
These are notable developments, but they ignore a few important facts. While coal use has slowed significantly in China, manufacturing emissions for the same three-year period increased across the board in the production of aluminum, steel and cement.
Any Chinese cap-and-trade scheme would likely protect the country’s competitiveness by subsidizing key export sectors, thereby providing an even greater trade advantage.
To their credit, Chinese leaders are playing the international climate agenda to their favor. The same cannot be said of some U.S. policymakers, who, intentionally or not, are advancing policies that threaten to put the final nail in the coffin of U.S. manufacturing.
The threat is real. According to a report published last year, Chinese imports destroyed roughly 1 million U.S. manufacturing jobs from 1999 to 2011.
Today, Chinese cement and steel production accounts for more than half of global output. By comparison, U.S. production of those goods is 5 percent or less. Under such a trend, the elimination of the last few remaining U.S. jobs in energy-intensive industries could be right around the corner.
Trump’s promise to cancel U.S. participation in the Paris Agreement, as well as his November 2012 tweet, is likely based on concern for U.S. competitiveness. America’s energy-intensive industries are already struggling under the Obama administration’s expanded regulatory, tax and trade regimes.
The Clinton campaign is promising to make American manufacturing the “cleanest and most efficient in the world.” Her administration would achieve that objective by regulating greenhouse gas emissions from trade-exposed industries, such as steel, cement, and aluminum, in order to meet President Obama’s Paris pledge to slash U.S. greenhouse gas emissions up to 28 percent by 2025.
Unilateral carbon regulation on U.S. manufacturing, justified by a poorly-designed international climate framework, would only add to the competitive advantage of China and other economies that do not face the same constraints.
If Clinton wins the White House, we can only hope that she does not fulfil her promise to implement policies that ultimately shut it down.
Environmental and climate mitigation goals are important, but such policies must be based on a rational approach and balanced by sound economic principles that promote the national interest.