Green hypocrisy: Still kicking the ladder

Under the guise of benevolent greenie-speak, governments of developed countries are once again pushing for old-school protectionist industrial policies as they see their technological advance crumbling vis-a-vis the emerging countries.

While developed countries engage in esotheric greenie-speak despite being the largest per capita polluters, emerging countries have embarked on an impressive industrial upgrading towards innovative, R&D intensive energy sectors: Within ten years, India-based Suzlon Energy has become the largest wind turbine manufacturer in Asia (5th in worldwide). In 2009, China has overtaken Denmark, Germany, Spain and the US in the production of wind turbines, increasing her installed wind power capacity almost 25 fold in only 4 years. China has also leapfrogged the West in two years to become the largest manufacturer of solar panels.

In response, EU and US have adopted a hypocritical and highly inconsistent stance, calling for protection in face of increased (free market) competition. Months ago, Sarko called for "carbon tariffs" to prevent carbon leakage, thereby forcing emerging countries to adopt more sustainable manufacturing (de facto stifling its manufacturing by imposing tight regulation). Not only has this populist (and by the way WTO non-compliant) call been supported by Stiglitz beginning this year. Only two days ago, the French have renewed their calls for a "carbon tariff", underlining its importance in fighting global climate change. Similarly, "Lord" Turner (head of UK climate change committee) has likewise called for a levy against cheap (Asian) imports to stimulate the transition to a green economy. Just today, Germany's green party even openly called for protectionism against Chinese solar imports.

Most proponents of first-world protectionism, however, have been much more subtle, and it is amusing to see how yes-we-can greenie-speak is employed to disguise policies that are, at the end of the day, deeply nationalistic and run against the neoclassical free trade ideology. Of course, this kicking away the ladder-mentality is nothing new to the developed world. Nevertheless, it will be very interesting to see how the developed world will bend its own WTO rules to implement yet another round of ladder kicking (see image).