On July 27 negotiators reached a compromise settlement in the world’s largest anti-dumping dispute, regarding Chinese exports of solar panels to the European Union. China agreed to constrain its exports to a minimum price and a maximum quantity. The solution is restrictive relative to the six-year trend of rapidly rising Chinese market share (which had reached 80% in Europe), and plummeting prices. But it is less severe than what had been the imminent alternative: EU tariffs on Chinese solar panels had been set to rise sharply on August 6, to 47.6%, as the result of a “finding” by the EU Trade Commissioner that China had been “dumping.” The threat of likely retaliation by China helped persuade the Europeans to back off from their determination to impose such high protective walls around their own solar panel industry.
Tag Archives: environment
Advice for the New Administration: Spend Green Today, Tax Green in the Future
Politicians are often tempted to think that a policy to help one goal, say air quality, must also help lots of other goals, say economic growth. Economists are more likely to presume tradeoffs, and to use the principle of targets and instruments. That principle says that you cannot expect to hit more than one bird with one stone, except by coincidence.
At the American Economic Association meetings in San Francisco, January 3, I was on a panel titled “Energy and the Environment: Policy Advice for the New Administration” (along with some real energy experts; I am a relative latecomer to the area). Within the framework of targets and instruments, I proposed a matrix such as the one that appears below.