The Solitary Attempt: International Trade Law and the Insulation of Domestic Greenhouse Gas Trading Schemes from Foreign Emissions Credit Markets

Abstract

This Comment examines the influence of international trade agreements on the implementation of a hypothetical, domestically-scaled cap-and-trade scheme to facilitate greenhouse gas emissions reductions in the United States. Several areas of intersection are examined, including the contemplation of the credits as commodities for trade and the construction of measures designed to offset any competitive disadvantage such a system might put on domestic companies. The Comment concludes that a domestically-scaled cap-and-trade scheme, while an important step in mitigating global climate change, is vulnerable to challenges under existing international trade agreements. Such challenges, if successful, may in turn drive the convergence of policy goals and mechanisms on an international scale, thereby undercutting the United States' ability to pursue regulatory goals distinct from the rest of the world. In order to best protect domestic interests, the nation should augment the development of domestic policies with the active negotiation of international emissions reduction goals and agreements on the treatment of emissions credits under international trade regimes.

Keywords: carbon, cap and trade, international trade law, greenhouse gas, climate change, emissions credits