President Donald Trump will reject one concept and embrace another as he confronts China on trade and pollution. He expressed skepticism for “the concept of global warming created by and for the Chinese in order to make U.S. industry noncompetitive.” But he will not overlook Chinese industry’s subsidized, mammoth coal-fired pollution (5 billion tons of coal per year, set to double again by 2030). This cheap, toxic energy poisons the air from China to the Rockies and kills millions of people, while enabling Chinese manufacturers to kill U.S. industry and jobs.
The tiger Mr. Trump must tame is smaller than China itself. Sierra Club found that the factories of just 15 companies controlled by 21 individual Chinese princelings are responsible for double-digit percentages of China’s deadly emissions. While the Chinese government struggles to adopt new technologies and reduce emissions, these 21 tycoons personally amassed fortunes totaling $70 billion while destroying air, water, farmland, industries and human life.
World Trade Organization-violating subsidized Chinese coal is finishing off the U.S. steel, cement, aluminum and other energy-intensive industries. Zhang Shiping, who owns Hongquio Group, the world’s newly largest aluminum company, converts his discounted coal into a mobile stew of deadly air toxins. He also “strips and ships” raw materials from developing African countries like Guinea, leaving a trail of ecological and social destruction.
Aluminum can be produced cleanly, as Mr. Shiping’s competitors do using hydropower as their primary energy source. And it can be efficiently produced in America, although U.S. companies cannot compete with the low cost of Mr. Shiping’s subsidized, toxic power. Alcoa was forced to shutter almost all of its U.S. factories and break itself up. Century Aluminum cited “the improper export of heavily subsidized Chinese aluminum products” when it closed its Kentucky factories and fired all its workers.
The particulate emissions from 5 billion annual tons of coal kills millions. “Particulates” are solid particles and liquid droplets of carcinogenic toxins, some less than one-thirtieth the size of a human hair, suspended in the air. These particles invade our lungs and bloodstream, resulting in birth defects, cancer, cardiovascular dysfunction and death. The Chinese people suffer the most from coal combustion and malevolent industrial dumping practices. Particulate matter in China causes 17 percent of all Chinese deaths and two birth defects a minute. Up to 70 percent of China’s farmland is contaminated and 90 percent of China’s groundwater is polluted.
As particulates, heavy metals and other poisons emitted by China’s coal combustion move downwind across the East China Sea, 40 percent of Tokyo’s air pollution emanates from Chinese factories. China’s pollution travels all the way to the U.S. Rockies in as little as four days. A NASA study showed that 25-30 percent of California’s air pollution originates in China. Another study shows nearly half the air quality improvements in the western U.S. are significantly offset by invading Chinese pollution, a “cost” borne by both the U.S. public and automakers.
The consequences for U.S. companies and workers are catastrophic. Mr. Trump correctly implied the burdensome U.S. regulatory regime selectively punishes U.S. companies with huge costs, yielding ever-cleaner emissions in the U.S. largely erased by the Chinese pollution crossing the Pacific.
One way to ensure a more level playing field (and global emissions reductions) would be to bring cutting-edge cases in the World Trade Organization and domestic trade courts alleging that China’s anti-competive coal benefits and selective pollution enforcement are government subsidies that demand countervailing duties on Chinese imports. Or the U.S. could impose nondiscriminatory harmonizing tariffs on imports produced in unregulated markets. Forcing Chinese industry to compensate for the subsidies it receives would change the world’s economic calculus by reducing market demand for the dirtiest emission fuels.
Fair countervailing duties and border adjustments that comply with World Trade Organization rules would price the worst polluters out of the global markets they dominate today at the cost of millions of lives and American jobs. Market-oriented pricing of pollution would reduce traditional pollutants in developing countries that are beyond the reach of the U.S. Environmental Protection Agency. It would also enhance energy independence, explaining in part Exxon Mobil’s longstanding support for a carbon levy.
Alternatively, China will continue its “double dumping” of subsidized (regulatory and financially) products and particulate pollution, undermining all the costly environmental steps the U.S. has taken to date. The 1990 acid rain cap-and-trade program virtually eliminated acid rain in less than a decade at one-fifth the expected cost. U.S. industry and environment would benefit enormously from a similar pricing of pollution at our borders.