PowerSwitch

[Miw]

Hi All, I am new so I am sorry if this is a newbie question that has been asked many times before:

Since TEQs are only a national scheme, and we can’t count on all other countries implementing it at the same time as any single country does, will TEQs push manufacturing overseas?


An example will make this clearer. Imagine you want to buy a bed. This purchase will not require the surrender of any TEQs units (as it not a purchase of fuel or energy), but the manufacturer of the bed will have had to purchase TEQs units to cover the energy they used in its production. And the company that transported the bed to the shop, or to your home, will have needed to purchase TEQs units too. These companies will ultimately pass on this cost to their customers, like you.
http://www.teqs.net/faqs/#WhyOnlyFuel

For example, if I run a bed shop, I can buy the beds from a local bedmaker in my own country, or I can get them abroad. If I buy them from the local bedmaker, I do save on transport but I have to pay for the energy used in manufacturing. If I buy them from abroad, I assume I have to shoulder the cost of TEQs to transport the beds from the port to my shop but I do not have to pay anything for the carbon cost of manufacturing (since I am buying from a country that doesn’t have its own TEQs system) or for (I am assuming) the shipping costs?

Please correct me if I am missing something, but from my point of view this will only exacerbate the already severe problems we have in the world with developed countries outsourcing a huge manufacturing burden onto China?

[Little John]

You are correct. TEQs, like any other form of economic smoke and mirrors, is just another way of moving the dek-chairs around while the ship continues to sink

[Catweazle]

It will be the same as Health & Safety regs, Toxic Waste regs, Minimum Wage regs etc., etc.

UK retailers will find manufacturers abroad who will be cheap by virtue of not abiding by our regs.

[johnhemming2]

TEQs would have to be international.

[Miw]

Need to address that we want countries like China and India to basically be factories for wealthier nations, take on manufacturing burden for them and suffer the localised effects of emissions, while at the same time berating them for producing so many emissions and saying they are causing CO2 ppm to rise.

1 -TEQs would have to be international

I think our most feasible chance at that within a useful timescale was that within the EU and the single market, since there is a blanket Paris Agreement pledge for the whole of the EU to reduce its emissions level by 40% by 2030 and because most EU countries are developed/wealthy to the point where there is more scope for us to and it is easier for us to reduce emissions than say, India where a lot of citizens are not yet on the electricity grid. That EU countries would have a common incentive and common aims to work towards would make an EU-wide international implementation of TEQs more plausible.

2 -Tariffs on goods made overseas, based on their country’s emissions level

If there is a best case scenario outcome from Brexit, the UK could still be within the EEA while having more flexibility to decide tariffs on goods from non-EU countries. If we optimistically imagine that 1) above is implemented, and that enough heavy-hitting nations ratify the Paris Agreement in order to bring it fully into effect, then imposing heavy tariffs on goods manufactured in countries which are not properly working towards or meeting their emissions pledges, while giving preferential import treatment to those who are meeting their pledges or ratcheting up their ambitions, then it could encourage overseas manufacturers and corporations to put pressure on their governments to reduce their emissions while also encouraging UK businesses to favour UK manufacturers and so push goods transportation emissions down.

I am not massively knowledgeable about economics / trade policy, I am just a guy who is interested in this, so please correct and educate me if I am way off base. Also I know that this a very optimistic scenario, based on 'best case situations' and based on governments and policy being on side, so if you have more ‘realistic’ ideas on how it could be made to work, please tell me!

[Little John]

You'd have to be optimistic beyond measure to think that the EU would implement this since they are hell bent on signing the whole of Europe up to TTIP and CETA. Which is the antithesis of all you have mentioned.

It doesn't matter which mainstream body you choose to rule you, they all currently represent the interest of corporate capitalism and those interests are in direct opposition to the aims you outlined.

However, what Brexit does is allow the people of this country to have at least a democratic chance of holding that body politic to account.

[johnhemming2]

Very few trade agreements have a directly elected assembly. To that extent the structure of the EU is better than most trade agreements. It also takes into account working conditions and environmental questions.

[emordnilap]