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Climate equivalence and international trade
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1028-3625
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EUI RSC; 2022/64; Global Governance Programme-479; [Global Economics]
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LYDGATE, Emily, Climate equivalence and international trade, EUI RSC, 2022/64, Global Governance Programme-479, [Global Economics] - https://hdl.handle.net/1814/74966
Abstract
This article examines a significant question in navigating trade and climate tension: how to recognise another country as having equivalent climate regulation. Such equivalence forms the foundation of many proposed models of so-called climate clubs. Establishing equivalence between distinct national climate regulation regimes poses a unique challenge that draws upon both trade and environmental international cooperation. Drawing on existing proposals, I examine prospects for country-based cooperation through three models: ETS-linking, benchmarking of shared methods and minimum standards, and benchmarking of outcome duties. The analysis concludes that all models necessitate some trade-offs between the goals of rigorous oversight of climate objectives, inclusivity, and WTO-compliance. Benchmarking of shared methods and minimum standards seems most feasible, and would provide a deeper level of integration between trade and climate cooperation, but necessitates a shift in how countries, particularly the EU, oversee regulatory compliance.