The Economist July 17th 2021 Leaders 13
he shows is how out of touch he is. The protestersareyoung,
mainly black and dismiss the Castros’ revolutionof 1959 against
an Americanbacked tyrant as ancient history.
They have plenty to complain about. The pandemichasshut
off foreign tourism, aggravating the economy’s lackofhardcur
rency. Raúl Castro launched economic reforms,buttheywere
timid and slow, permitting only minuscule privatebusinesses.
It was left to Mr DíazCanel to take the most momentousstep,by
ordering a big devaluation in January. Without measurestoal
low more private investment and growth, that hasmerelytrig
gered inflation. As its sanctionshit oil industry collapses,Vene
zuela, Cuba’s chief foreign patron over the past 15 years,has
curbed its cutprice oil shipments, prompting powercutsduring
the heat of summer. Chronic shortages of foodandmedicine
have become acute. Despite Cuba’s prowess at publichealthand
its development of its own vaccine, the governmenthasfailedto
contain the pandemic. The sick are dying, abandonedathomeor
on hospital floors.
Two other factors explain the outburst. One isthechangeof
leadership. The Castros commanded respect evenamongthe
many Cubans who abhorred them. Mr DíazCanel,withouta
shred of charisma, does not. And the internet andsocialmedia,
allowed only in the past few years, have brokentheregime’s
monopoly of information, connecting younger Cubanstoeach
other and the world. They have empowered a culturalprotest
movement of artists and musicians. Its message,intheunan
swerablelyricsof“Patriay Vida”,is“Yourtime’sup,thesilenceis
broken...we’renotscared,thedeceptionisover.”
MrDíazCanelfacesa choice:toturnCubaintoBelaruswith
sunshine,ortoassuagediscontentbyallowingmoreprivateen
terpriseandgreaterculturalfreedom.Thatcouldweakenthear
myandtheCommunistParty,butitwouldeventuallysalvage
someoftherevolution’soriginalsocialgains.
Curiously,manyRepublicansintheUnitedStatesechoMr
DíazCanel’sdescriptionofAmerica’sroleintheprotests.Presi
dentDonaldTrumptightenedtheeconomicembargoagainst
Cuba,barringAmericantourists,curbingremittancesandslap
pingsanctionsonstatefirms,largelyreversingBarackObama’s
openingtotheisland.LikeCuba’spresident,Republicansargue
thattheunrestprovestheembargoisworkingatlast.
Notso.True,theembargohasmadelifeharderfortheCuban
government.ButitsrestrictionsmainlyhurtAmericans.There
gimecanstillbuyAmericanfoodandmedicineandtradewith
theworld.ThecausesofCuba’ssocialexplosionlieathome.
Openthewindows
JoeBidenshoulddrawtheobviousconclusion.Sofarhehasleft
MrTrump’sCubapolicyintact,soasnottoannoyhawkishCu
banAmericans.Insteadhe shouldreturntoMrObama’sap
proach.Thebigthreattoa closedregimeisengagementwiththe
world,especiallytheUnitedStates.MrBidenshouldlifttheem
bargoanddeprivetheregimeofanexcuseforitsownfailures.n
C
arbonprices are the most costeffective waytofightcli
mate change—but for them to work properly, emissions
must be priced everywhere. On July 14th the EuropeanCommis
sion unveiled its plan to levy what would, in effect,bea tariffon
some carbonintensive imports which, by virtueofhavingbeen
produced outside the eu, are not subject to its capandtradecar
bonpricing scheme. The idea is to stop Europeanfirmsfromre
sponding to the carbon price by moving productiontopartsof
the world where they can pollute without penalty,toshield
them from being undercut by rivals from such
places and to encourage foreign firms who want
to sell to Europe to go green.
There are sound reasons for applying carbon
prices to imports. But working out how to go
about it without causing a cycle of damaging
protectionism is a conundrum.
Were carbon prices global, the costs of ful
filling the Paris agreement on climate change
could fall by 79%, according to the Environmental Defence
Fund, a thinktank. Market forces would find the cheapest ways
to cut emissions. Yet a worldwide carbon market is a pipe dream.
(China is due to launch the world’s largest emissionstrading
system on July 16th, after we go to press, but permits will be far
too cheap.) Carbon tariffs are a fallback measure.
Free traders like The Economist typically reject tariffs on prin
ciple. Cheap imports bring lower prices, more choice, higher
productivity and incentives to innovate. Firms and workers con
stantlypleadforprotectionfromforeigncompetitors,alleging
thatjobsandprofitsmustbeshieldedfromunfairforeigncom
petition.Liberalsrespondthattheharmdonetoincumbentsby
thefreeoperationofmarkets—whateconomistscall“pecuniary
externalities”—donot,unlikeothertypesofharm,justifygov
ernmentintervention.“Societyadmitsnoright,legalormoral,
inthedisappointedcompetitors,toimmunityfromthiskindof
suffering,”wroteJohnStuartMillin1859, 16 yearsafterTheEcon-
omistwasfoundedtoopposetheCornLaws,whichkeptcheap
foodoutofBritaintothebenefitofitsincum
bentlandowners.
Carbontariffs,however,wouldnotbeinher
entlyprotectionist.Theyareanattempttoex
pandthereachofmarketforcesratherthanto
limitthem.Theopportunitytopollutetheat
mospherewithoutpenaltyisitselfa kindofdis
tortingsubsidy;moresoifitexistsunevenly
acrossborders.Preventingclimatechangeisa
global public good, meaning every country’s citizens have a di
rect interest in reducing emissions wherever they happen. Pric
ing carbon at the border should therefore be viewed as a special
case, and not as a precedent for using tariffs as a bludgeon with
which to impose local regulations or standards abroad.
The problems with carbon tariffs are thus not moral or eco
nomic but practical and political. Implementing the policy fairly
would mean ascertaining how much carbon has been emitted in
the production of a given import, and to what extent foreign
In principle carbon border taxesarea goodidea.Inpracticetheycouldbea gifttoprotectionists
Global greenhouse-gas
emissions covered by taxes*
%
*Or cap and trade schemes
20
10
0
1990 2000 10 21
Carbon and capture
Climate change