May 24, 2009  China cares about global warming, but it knows how to bargain. Gore just cares: "If the United States leads, China will follow," AP foreign. Why should China follow? Just to be nice? Like in Tibet? Meanwhile Waxman's cap-n-trade bill is offering China a $5 billion bribe not to follow. Here's how that "works."

Cap-n-trade permit prices, could go high due to speculation or shortages. That makes people nervous, so there's an "offramp." Instead of buying U.S. permits, you can buy up to one billion tons of permits from foreign countries. Under the Kyoto system, China's been selling close to half of these. Say we buy a billion and they cost $15—about what permits are expected to cost. So that's $7.5 billion to China. But if they had their own cap—following our lead as Gore says, they would need those "offsets" to meet their own cap. They get no $7.5 billion from U.S. business.

So why follow us down the self-cap road? Why not wait for us to pay them? That's what they're doing. It's good for the U.S. to cooperate, but there's no need to be naive.