Kuta Beach

Kuta Beach

Saturday, 21 March 2009

China and India Cooperation Needed?

Many claim that without cooperation from China and India, global coordinated reduction in carbon dioxide emission is doomed.

It is true that China and India are large economies but the economy outside these two countries is large as well.

Suppose, say, 20% of the world's coal, petrol, and gas is in India and China. If the other 80% is subject to taxation or emissions trading then this will increase the price of energy even in China and India.

OPEC controls less than 50% of the world's oil and they have considerable influence on the price. If the rest of the world controls about 80% of the world's raw material then together they will have a lot of influence on the price, and high price is what reduces consumption and emissions.

If China and India do not cooperate, raw materials may be cheap in China and India but expensive around the rest of the world. Companies may move to China and India. However, this cannot continue forever. If the whole world depends on China and India for energy then the heavy consumption will eventually deplete resources in the two countries and then China and India will be reliant on importing energy at higher prices.

Currently China and India already have to import oil, natural gas, and coal.

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