Transatlantic Perspective on Climate Change and Trade Policy

A workshop with Malachy Hargadon, Mun Ho, Trevor Houser, Gary Clyde Hufbauer, Bernice Lee, Thomas Legge, Jeffrey J. Schott, and Jacob Werksman

Nicholas H. Stern, London School of Economics

Peterson Institute for International Economics, Washington, DC

March 4, 2009

The Peterson Institute for International Economics and the World Resources Institute (WRI) cohosted a workshop to examine the trans atlantic perspective on climate change and trade policy on March 4, 2009. Lord Nicholas Stern, whose Stern Report on climate change has played a major role in international debate, delivered the keynote address. Leading US and European experts also spoke at the event on the impact of efforts to reduce emissions on trade-exposed industries, policy options for addressing competitiveness concerns, and how to reconcile these efforts with the international trading system and the UN Framework Convention on Climate Change. The event was part of the broader March 3 symposium US Climate Action: A Global Economic Perspective, cohosted by the Institute with the Center for Global Development (CGD) and the Grantham Research Institute.

As the world looks to broker an agreement at the Copenhagen Climate Conference in December 2009, trade has emerged as a central theme in both international negotiations and domestic policy debates. Countries are moving at various speeds in multiple ways to reduce emissions, and different targets mean different carbon prices. Countries that take more aggressive action to reduce emissions therefore risk putting their industries with a high exposure to carbon costs at a competitive disadvantage. How the European Union and United States address these issues will have major implications for both international climate negotiations and the global trading system.

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