The voluntary nature of the climate pledges under the Paris Agreement has resulted in significant compliance gaps that enable ‘free-riding’, which threatens to undermine the world’s efforts to reduce greenhouse gas emissions. One of the proposals to address this pressing issue includes the creation of a Nordhaus-style Climate Club, which would consist of a coalition of nations that are committed to reducing greenhouse gas emissions. They would do this by establishing a minimum domestic carbon price and applying trade penalties on imports from non-member countries. However, such a proposal could be challenged as being non-compliant with WTO rules.
While the WTO framework is becoming increasingly fragmented in an era of intensifying trade conflict, there are still compelling reasons to uphold multilateral trade principles. For the EU – a consistent advocate of a rules-based trading system and a longstanding champion of ambitious climate action – finding effective ways to enhance climate compliance in line with WTO rules is a timely challenge.
To explore the EU’s role in advancing a WTO-aligned approach to tackle the ‘free-riding’ problem that threatens to hinder the effectiveness of collective climate action, CEPS is pleased to host a roundtable discussion with Dr. David Tarr, an academic and policy advisor at the International School of Economics at Tbilisi State University and a former Lead Economist with the World Bank. He has also served as an advisor to governments in more than 25 countries on a wide range of international trade issues.
Dr. Tarr will present his vision for a WTO-compliant Climate Club, followed by reflections from leading experts:
- Dr. Constantine Michalopoulos, Senior Policy Advisor, ELIAMEP, former Special Advisor WTO, senior official, World Bank and USAID.
- Dr. Petros C. Mavroidis, Edwin B. Parker Professor of Foreign & Comparative Law at Columbia Law School.
