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Trade Measures and Climate Change

Searching for Common Ground on an Uneven Playing Field

This paper analyzes relevant measures in emerging U.S. domestic climate policies, describes the objectives of these measures, assesses how they might be imposed, and discusses their implications for both a future climate agreement and the international trading system.

Key Findings

Executive Summary

As the United States and other developed countries have enacted or are in the process of developing legislation to cap greenhouse gas emissions post-2012, their policymakers are under increasing pressure from domestic constituencies to include trade measures as part of climate policy. This Working Paper analyzes relevant measures in emerging U.S. domestic climate policies, describes the objectives of these measures, assesses how they might be imposed, and discusses their implications for both a future climate agreement and the international trading system. It also touches on proposals to use trade measures in the European Union and other developed countries.

Since it is unlikely that the U.S. or the EU would agree to an outright prohibition on the use of trade measures, or that China or India would agree to rules that explicitly authorized such measures, the UNFCCC COP should articulate a set of principles and procedures to limit the use of any trade measures to avoid, or help resolve, any disputes that might arise under the WTO or elsewhere.

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