Monday, February 18, 2008

Climate and GATT

Current proposed climate legislation (Warner-Lieberman) includes a section that would allow the United States to impose import duties on countries that don't have carbon regulations. This turns out to be important for political reasons. Any US legislator supporting constraints on carbon et al will want to avoid condemnation as a sucker. Some sort of effort to penalize imports produced without comparable constraints needs to be in the bill for that reason. (Remember 25% of China's carbon output is export based.) And it needs to be (at least) prima facie plausible when it comes to passing muster qua international regulations. But that turns out to be MUCH harder than one might think because of WTO-GATT rules.Here is a fascinatng first stab at the problem:

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