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Published: Friday 30 August, 2013

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climate policy that can provide meaningful reductions in emissions of CO2 and other greenhouse gases. I describe and analyze an upstream, economywide CO2 capandtrade system which implements a gradual trajectory of emissions reductions with inclusion over time of nonCO2 greenhouse gases, and includes mechanisms to reduce cost uncertainty. Initially, half of the allowances are allocated through auction and half through free distribution, with the share being auctioned gradually increasing to 100 percent over 25 years. The system provides for linkage with emission reduction credit projects in other countries, harmonization over time with effective capandtrade systems in other countries and regions, and appropriate linkage with actions taken in other countries, in order to establish a level playing field among domestically produced and imported products. sources.

A cap and trade program may be more effective if it can be tied to similar programs in other countries, so that credits can move across borders. Judson Jaffe and Robert Stavins look at the issues this raises in this working paper: AEI RegMarkets Center, January 2008. capandtrade system for greenhouse gas GHG emissions could be significantly reduced by linking that system with other existing and emerging tradable permit systems for GHG emissions. However, along with the cost savings that it offers, linking carries with it other implications. For example, linking has distributional consequences and, under some circumstances, linked systems collectively will not achieve the same level of emission reductions as they would absent linking. Also, linking can reduce a governments control over the impacts of its tradable permit system. Thus, in considering linkages, the United States and potential linking partners may have to weigh linkings implications for potentially competing policy objectives, much as will be required in developing other elements of their respective domestic climate policies.

Because linkings implications depend on the type of link that is established and the specific characteristics and design of the linked systems, in the nearterm, some links will be more attractive and easier to establish than others. Importantly, those links that may be the easiest to establish links with emission reduction credit systems such as the Clean Development Mechanism likely can provide much of the nearterm costsaving and riskdiversifying advantages that linking can offer. system and any systems with which it links. In particular, agreement on a unified set of measures to address cost uncertainty likely will be a necessary precondition for an unrestricted link with another capandtrade system. and linked systems beyond simply mutual recognition of allowances. raises the costs of domestic industries by requiring them to acquire greenhouse gas credits, there will be demands to impose border barriers to imports from other countries that dont impose similar control costs on their own industries. Simon Lester asks, Can Unilateral Carbon Measures Be Consistent with WTO Rules? International Economic Law and Policy Blog, February 20, 2008 and points to a an analysis from the law firm Sidney Austin concluding they can be: Testimony of Abraham Breehey. United States Senate Committee on Finance

Gary Hufbauer of the Peterson Institute looks at the issues this raises in testimony to the House Committee on Energy and Commerce: Climate Change: Competitiveness Concerns and Prospects March 5, 2008. The control systems adopted by various countries will differ in major respectsboth as to the severity of limitations and th wedge trainers isabel marant e details of operation. The combination of enormous costs, huge values and systemic differences will generate tremendous lobbying pressure and protectionist forces.

Sauce for the goose is sauce for the gander. Any restriction the United States imposes on imports, citing climate change as justification, can just as easily be imposed by other countries on US exports. Any performance standards that the United States imposes on foreign firms, and any comparability tests the United States imposes on foreign GHG control systems, can be turned around and imposed on the United States. Early US efforts will strengthen the US hand when it comes to designing the postKyoto Protocol regime. Application of basic World Trade Organization WTO rules to foreseeable GHG emissions controls is far from cut and dried. Only a brave or foolish lawyer would give this Committee strong assurance that suchandsuch a system of GHG controls is immune from challenge in the WTO. almost all trade restrictive measures stand a fair chance of being challenged in the WTO.

If the United States enacts its own unique brand of import bans, border taxes, and comparability mechanismshoping that measures which flaunt GATT Articles I, III and XI will be saved by the exceptions of GATT Article XXthe probable consequence will be a drawnout period of trade skirmishes and even trade wars. During these battles, some countries will become more fixated on winning legal cases than fighting the common enemy, climate change. Global cooperation in limiting emissions could be the first casualty of a unilateral approach that ignores the basic GATT articles.

Crossposted from The Custom House.

Well have wedge trainers isabel marant a lot of decisions to make in the face of Arctic climate change. This blog is about the range of available choices, and about the tradeoffs involved in making them. Ben Muse, an Alaskan economis wedge trainers isabel marant t, is the blogger. Muse works for a resource management agency. However, any opinions expressed here are his and not necessarily the positions of any former or current employer. In the interests of full disclosure, Muses current employer has fisheries, marine habitat, endangered species, and marine mammal management responsibilities in the Arctic. wedge trainers isabel marant

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