Global Warming and the World Trading System

by Gary Clyde Hufbauer and Steve Charnovitz and Jisun Kim
March 2009
Book Description

In 2006, a team led by the English economist Sir Nicholas Stern issued a striking report that analyzed the economic dimensions of global climate change and called for immediate collective action to reduce greenhouse gas (GHG) emissions. This seminal report poses the critical question of how much emissions should be reduced within specific timeframes.

To answer the challenge of finding a best-practices approach, Global Warming and the World Trading System looks at the economic aspects of GHG emissions and seeks a policy method to reduce them without adversely affecting global trade. The book begins with a survey of relevant data—such as emissions reports per sector—and evaluates current US climate policy options, focusing on the intricacies of specific Congressional bills. In this vein, this study examines whether the competitiveness provisions now under consideration are compatible with the rules of the World Trade Organization (WTO) and explores the pragmatic opportunities the WTO should capitalize on in order to accomplish two goals simultaneously:

  1. Ensure "policy space" for countries to limit national GHG emissions without sacrificing the competitive position of their own industries.
  2. Preserve an open trading system relatively free of discrimination and opportunistic protectionist measures.

Should governments use trade measures to encourage other countries to cooperate in the adoption of environmental policies? The authors anticipate the potential negative environmental and economic outcomes as well as the disputes over violation of GATT articles. This book addresses how to avoid serious setbacks in an effort to reduce emissions without compromising the status of both domestic and international carbon-intensive industries. Most importantly, the book considers what can be done by environmental organizations to head off conflict with the WTO.

Chapters are provided for preview only.



1. Introduction [pdf]

2. Overview of Applicable World Trade Organizations Rules

3. Status of Climate Measures under the Law of the
    World Trade Organization
4. Future Climate Policy and the World Trade Organization

5. Elements of a Trade and Climate Code [pdf]




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Book Data

March 2009
ISBN Paper 978-0-88132-428-0
166 pp.

Commentaries on This Book

"This volume is well researched and written. . . . Highly Recommended."

Choice Magazine

"Global Warming and the World Trading System represents the best tradition of the Peterson Institute for International Economics. It takes on a hard problem at a critical juncture and offers insightful analysis as well as practical policy solutions that promise to advance understanding and policymaking at both the national and global levels."

The Journal of World Trade

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