*I wish to thank Carolyn Fischer from Resources for the Future; John Daley, CEO of the Grattan Institute; and the anonymous reviewers of this article for their constructive feedback. This research is part of a larger project on the relationship between the climate regime and the international trading regime, funded under an Australian Research Council Discovery Grant.
The Politics of Carbon Leakage and the Fairness of Border Measures
Version of Record online: 16 DEC 2010
© 2010 Carnegie Council for Ethics in International Affairs
Ethics & International Affairs
Volume 24, Issue 4, pages 367–393, Winter 2010
How to Cite
Eckersley, R. (2010), The Politics of Carbon Leakage and the Fairness of Border Measures. Ethics & International Affairs, 24: 367–393. doi: 10.1111/j.1747-7093.2010.00277.x
- Issue online: 16 DEC 2010
- Version of Record online: 16 DEC 2010
The article critically examines domestic political concerns about the competitive disadvantages and possible carbon leakage arising from the introduction of domestic emission trading legislation and the fairness of applying carbon equalization measures at the border as a response to these concerns. I argue that the border adjustment measures proposed in the emissions trading bills that have been presented to Congress amount to an evasion of the U.S.'s leadership responsibilities under the United Nations Framework Convention on Climate Change (UNFCCC). I also show how the “level commercial playing field” justification for border measures that has dominated U.S. domestic debates is narrow and lopsided because it focuses only on the competitive disadvantages and direct carbon leakage that may flow from climate regulation while ignoring general shifts in the production and consumption of emissions in the global economy, which have enabled the outsourcing of emission to developing countries. The UNFCC production-based method of emissions accounting enables Northern consumers to enjoy the benefit of cheaper imports from Southern producers and to attribute the emissions associated with this consumption to the South. I argue that it is possible to design fair border measures that address carbon leakage, are consistent with the leadership responsibilities of developed countries, do not penalize developing countries, and ensure that consumers take some responsibility for the emissions outsourced to developing countries.