Countries such as Canada and the United States may impose a "carbon tariff" on goods from China and other developing countries in the next few years, a move that could bring manufacturing jobs back to North America, CIBC World Markets predicts.
The investment bank's report says the economies of China, India and other developing countries have expanded so much that they now surpass the established industrialized world in belching out carbon dioxide pollution blamed for climate change.
"It becomes absurdly quixotic to ban coal plants in North America while at the same time China's got 570 coal plants slated to go into production between now and 2012, 30 plants between now and the Olympics," CIBC economist Jeff Rubin says.
"We're moving in opposite directions."
With some advanced countries enacting carbon taxes, carbon trading systems and other measures to lower emissions, CIBC believes the growing pollution from developing countries will provoke penalties against their exports.
That would benefit the environment, and will also bring certain jobs back to North America, since carbon emission taxes and high oil prices would offset the benefit of cheap labour, Rubin says.
"Chinese goods will have to pay for the carbon that they emitted and they'll pay for that when they enter our marketplace by paying that tariff," Rubin said in an interview.
Rubin believes the tariff, based on $45 per tonne of carbon dioxide or equivalent, would raise roughly $55 billion a year from Chinese exports to the United States, and raise U.S. consumer price inflation by more than 0.6 percentage points.
Many in the West assumed that since industrialized countries were primarily responsible for the historical build-up of greenhouse gases (GHGs) in the world, they should bear the brunt of efforts to cut back, a view that underpinned the Kyoto Protocol in 1997, which exempted developing countries.
But Rubin sees a shift in sentiment.
"What I'm suggesting is that the minute that we start putting a price on our own domestic emissions, then our tolerance of those who do not is going to fade very quickly," he said.
Starting July 1, British Columbia will introduce an escalating carbon tax of $10 per tonne of carbon, or about 2.4 cents on a litre of gasoline.
The tax will be applied to most fossil fuels.
But such taxes have yet to catch on in the rest of the country.
Federal Environment Minister John Baird has said the Conservatives would continue with regulations targeting big polluters to control carbon emissions rather than taxes.
Alberta, by far the largest GHG emitter in Canada, opposes a carbon tax, and both Ontario and Manitoba have said they won't consider it.
