The Coal Trap

The geopolitics of pollution and economic growth are gnawing at China. Even if China starts to meet its Green GDP targets, a swelling economy and population means more pollution, in absolute terms. The West counts on China for inexpensive textiles, cement and steel--but is putting pressure on Beijing to raise the value of the yuan, which would slow exports, and to clean up its foul environment. Beijing resents the scolding, partly because China needs rapid growth to produce jobs and partly because the West has been a major contributor to global warming. Alex Westlake, chief operating officer of the London-based carbon-trader Camco International suggests that China should resist pressure to revalue the yuan and instead "increase the environmental and social costs of the goods it produces." In short, impose a coal tax on Chinese goods. That's likely to happen over time. With so many new coal projects in the works, the costs will reverberate worldwide. But so, too, will the benefits of a cleaner China.

© 2007