CALGARY — Manufacturers that have relocated to China may soon be coming home if the Western world imposes a “carbon tariff” on countries that spew greenhouse gas emissions, according to Jeff Rubin, chief strategist and economist at CIBC World Markets.

Mr. Rubin, in a report issued on Thursday morning, said it is clear Western countries are moving quickly to reduce their own greenhouse gas emissions and he highlighted that China's estimated emissions in 2007 supplanted the United States after rising rapidly through this decade.

Given the increasing emissions imbalance between the developed world and countries such as China, Mr. Rubin said the “only leverage is through trade access,” specifically a “carbon tariff.” Mr. Rubin predicted such a tariff, based on $45 per tonne of carbon dioxide or equivalent, would be $55-billion annually, a 17-per cent levy on all Chinese imports to the U.S. — almost six times greater than the effective current import tariffs.

The main impact of such a scenario would be on companies that have moved their factories to China — and consumers in North America. In a world where carbon emissions cost nothing, moving to China, with its cheap labour, made perfect sense, Mr. Rubin said. That situation is unlikely to last, he added.