I wrote this piece three years ago, and while the recession has essentially pushed climate change action off the table because of the associated economic costs, I think this is still a workable way forward for internationalizing a climate change regime. From World Politics Review, January 27, 2009, Linking Climate Change and Trade:
There is a simple solution, however. In order to implement a serious international regime to control carbon emissions, the United States will ultimately need to incorporate emissions reductions into its trade policies, and impose tariffs against countries that refuse to participate. In fact, including climate issues in trade discussions will ensure that the market accurately prices the value of internationally traded goods and services.
As developed nations begin to implement controls on greenhouse gas emissions, the production costs in associated industries will increase. Unless other countries also pass such controls, they will gain a production advantage as a result. In short, if we limit our emissions, but China and India fail to do so, we will ultimately find ourselves exporting production, jobs, and greenhouse gas emissions to those countries.
In addressing this issue, it is important to make the distinction between pollution and climate change. Ultimately, each country has the right to pursue its pollution targets independently. While there are complicated moral issues associated with this kind of trade, if one country places a lower value on clean air and water than another, then it makes sense for the latter to export pollution-causing industries to the former. The advantage of sending pollution abroad is that it does, indeed, help the exporter maintain cleaner air and water.
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