WILSON: Green protectionist folly

OPINION:

Under environmental disguises, industry and labor unions are running parallel campaigns with environmentalists seeking to roll back free trade. For years, “green” groups have been pushing for environmental trade restrictions in developed countries such as the United States. Carbon tariffs, forestry import bans and certification requirements on the origin of products have become regular fixtures of environmentalists’ demands.

Now their cause is being adopted increasingly by labor unions, which have found environmentalism a back door for protecting their members’ jobs from competition, and by industry, which has found them a way to cut import competition to help make a buck.

A regular player is the Blue Green Alliance: a collusion of labor unions - from steelworkers to service-sector employees - and green groups such as the Sierra Club. They’re pushing for government support to create “green” jobs by stopping forestry imports. They’re also becoming particularly activist. This week, Blue Green launched a 17-state tour from California, arguing “The Job’s Not Done” to push for the greater adoption of renewable-products and climate-change legislation. But the snag is that the groups also want carbon tariffs introduced.

Regardless of progress with government, green groups are pushing their agenda down the business supply chain. They pushed the office-supply retailer Staples to introduce a “sustainable paper” procurement policy that highlights the campaigns of the World Wildlife Fund and the Rainforest Alliance and sets tight restrictions on where paper products can be sourced and on certification requirements. Office Max has signed on as a member of green groups such as Greenpeace and the Rainforest Alliance and also requires certification of its paper products.

Not that industry’s hands are clean.

Despite protests on the impact of imports from China on its industry, the paper giant Kimberly-Clark “has announced that they will expand their manufacturing facilities in China,” according to a briefing paper from the Washington, D.C.-based Economic Policy Institute, “No Paper Tiger.” Yet in Australia, Kimberly-Clark’s subsidiary KCA has taken the Australian government to court to force the introduction of green-trade restrictions on imports from Indonesia and China.

They’re trying to have it both ways.

There is a reason to believe the greens, labor unions and industry converted to the green cause are starting to get the ears of lawmakers. In 2008, campaigns to amend the Lacey Act, requiring obligations on importers to identify the source of wood products, succeeded. Since then, the Obama administration has shown sympathy for going further.

Now the Australian equivalents are working in tandem to replicate U.S. groups’ Lacey Act success through the Labor government. Before the last federal election, the forestry union donated $25,000 to the Labor Party around the same time the party committed to “greater policing and enforcement of an effective national ban on the sale of illegally logged timber imports.”

The Labor government is seeking re-election, and the minister for forestry, Tony Burke, announced this week that he would implement trade bans and heavy regulation on timber imports if re-elected. Following his announcement, industry, unions and green groups all rushed in with applause and called for the minority Liberal Party to announce the same commitment.

In pushing its campaign, the forestry union argued openly for consumers to buy Australian-made paper products “[so] thousands of Australian workers [are] paid properly [and] more of your money stays in Australia.”

But green protectionism will come with heavy costs.

If green trade barriers are erected to limit imports from high-growth, developing-country markets, the loss of consumer markets will also diminish their attractiveness as investment destinations for developed-country capital. The risk of escalation also exists, with developing countries seeking avenues to retaliate against developed-country exports.

Then there’s the impact on consumers.

Australian Customs concluded that the downward pressure from Indonesian and Chinese products could cut prices between 5 percent and 42 percent. Such downward pressure isn’t good for companies seeking fat profits - but it is good for everyone who needs to buy paper. Similar downward price pressure is likely in the United States.

But if green groups, labor unions and industry have their way, their green regulation won’t be designed to make prices cheaper. It will be designed to make you pay more.

Tim Wilson is director of the Sustainable Development Project at the Institute of Public Affairs and author of a new report, “Green Excuses: Collusion to Promote Protectionism?”