Greenhouse gas legislation that increases the cost of production for greenhouse gas emitting businesses in the U.S. raises concerns about U.S. firms that compete with firms from countries without equivalent greenhouse gas legislation.
The Brookings Institution held a conference on the issue on Monday. Here's some of the background, and links to papers, from the conference web site (Climate Change, Trade and Competitiveness: Is a Collision Inevitable?):
On June 9, 2008, Brookings convened more than 70 stakeholders for a conference on “Climate Change, Trade and Competitiveness.” The conference was led by Lael Brainard, Vice President and Director of Brookings Global, and focused on how climate change presents a new set of challenges for the world trading system.
Participants discussed potential conflicts that may arise as some wealthy nations begin to adopt carbon pricing regimes while others resist any policies that might limit their growth. Additionally, as the leakage of carbon emissions and the resulting shift of production across borders have attracted the attention of policymakers, participants debated potential policy solutions and their affect on economic competitiveness and the environment.
Conference papers cover a number of related issues, including: governance of climate change and trade issues, potential economic and environmental effects of border adjustments for carbon taxes, technology transfer and climate change, international trade law and options for addressing leakage/competitiveness issues.
The link above provides access to six or seven draft conference papers, and materials prepared by commenters.
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