Environment & Climate Change

Authors Christoph Böhringer and Thomas Rutherford evaluate the efficacy of imposing carbon tariffs on U.S. imports as an alternative to U.S. participation in the Paris Agreement. The authors warn that carbon tariffs on the United States could lead to a tariff war that ultimately hurts China, in particular, and the European Union more than the United States.

Robert Stavins argues for an economic approach to solving environmental problems and explains why "environmental economics" is not an oxymoron.

This discussion paper explores the potential adverse impacts of unilateral climate policies on domestic energy-intensive and trade-exposed industries.

The United States has considerable tax administration and cap-and-trade expertise that could highlight potentially successful carbon pricing approaches. Although this experience is not climate-related, the United States deploys an efficient and highly compliant excise tax system, and it could assist developing country efforts to build their own capacity to tax carbon. The United States also has long experience with cap-and-trade systems for criteria air pollutants, much of which is transferable to greenhouse-gas emissions trading.

In pursuit of a workable successor to the Kyoto Protocol, this study offers a framework of formulas that produces precise numerical targets for emissions of carbon dioxide (CO2) and other greenhouse gases, in all regions of the world in all decades of this century....Firms, consumers, and researchers base their current decisions to invest in plant and equipment, consumer durables, or new technological possibilities on the expected future price of carbon: If government commitments are not credible from the start, then they will not raise the expected future carbon price.

The Kyoto Protocol establishes a very complex and ambitious regime, in architecture if not stringency. The problem is that relatively few states, representing only about a quarter of the world's emissions, have been willing to assume emission targets under Kyoto....The future of the Protocol thus seems doubtful at best. Even in the most optimistic scenario, a new round of emissions targets couldn't be agreed in time to prevent a legal gap between the first and second commitment periods. A possible middle ground would be to establish a transitional regime that would be political in nature, but that could evolve over time into a legally-binding regime.

With regard to developing a new international framework, developed countries should acknowledge how grave the consequences would be to easily give in to a Kyoto extension. Merely extending the Kyoto Protocol would surely delay mitigation actions on the part of developing countries and discourage the U.S. from making serious efforts to reduce its large energy consumption. In other words, no country should end up being a "climate-killer" in its attempts to avoid being called a "Kyoto-killer."