%0 Unpublished Work %D 2009 %T Addressing the Leakage/Competitiveness Issue in Climate Change Policy Proposals %A Frankel, Jeffrey %X

We will likely see increasing efforts to minimize leakage of carbon to non-participating countries and to address concerns on behalf of the competitiveness of carbon-intensive industry. Environmentalists on one side and free traders on the other side fear that border measures such as tariffs or permit-requirements against imports of carbon-intensive products will collide with the WTO. There need not necessarily be a conflict, if the measures are designed sensibly. There are precedents—the shrimp-turtle case and the Montreal Protocol—that could justify border measures to avoid undermining the Kyoto Protocol or its successors, if the measures are carefully designed. But if the design is dominated by politics, as is likely, import penalties are likely to run afoul of the WTO, to distort trade, and perhaps even to fail in the goal of preventing leakage. Border measures should follow principles along the following lines:

%B %8 Apr 9, 2009 %G eng %1 4792