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Unilateral Climate Regulation

James W. Coleman

University of Calgary - Faculty of Law; University of Calgary - Haskayne School of Business

March 21, 2013

Harvard Environmental Law Review, Forthcoming

It is now plain that decades of negotiation toward a binding global climate treaty have failed. Yet, at the same time, many nations are adopting a range of unilateral policies to address climate change. The existing literature on climate policy neglects these unilateral climate regulations because it focuses on the necessity and possible design of a multilateral climate treaty. But these domestic regulations present a unique puzzle: given that climate outcomes are determined by global emissions, and that unilateral regulations inevitably influence incentives to regulate elsewhere, how can domestic action achieve the greatest marginal reduction in global emissions? In other words, how can regulators encourage, rather than discourage, action in other countries?

This Article answers this question by describing three ways that unilateral regulation influences incentives to regulate in other countries. First, domestic regulations can interact with other nations’ regulations in a way that increases those countries’ incentive to regulate. Second, unilateral regulation can support incentives to regulate elsewhere by limiting the incentive for polluters to move, or “leak,” to countries with weaker regulation. Third, unilateral regulations that are modular and simple will serve as potential model rules in a wider swathe of countries. These considerations have important implications for regulators looking to maximize the global impact of their unilateral actions. They suggest that, contrary to the received wisdom in climate policy, regulators should prefer regulation with publicly transparent costs. They also suggest that, contrary to the current state and federal preference for cap-and-trade systems and energy-efficiency standards, unilateral regulators should prefer carbon taxes and funding for green technology.

Number of Pages in PDF File: 48

Keywords: matching commitments, linking climate regulation, carbon leakage, energy policy, cap-and-trade, carbon tax, greenhouse gas emissions

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Date posted: March 23, 2013 ; Last revised: March 11, 2014

Suggested Citation

Coleman, James W., Unilateral Climate Regulation (March 21, 2013). Harvard Environmental Law Review, Forthcoming. Available at SSRN: http://ssrn.com/abstract=2237623

Contact Information

James W. Coleman (Contact Author)
University of Calgary - Faculty of Law ( email )
Murray Fraser Hall
2500 University Dr. N.W.
Calgary, Alberta T2N 1N4
HOME PAGE: http://www.energylawprof.com/
University of Calgary - Haskayne School of Business ( email )
2500 University Drive, NW
Calgary, Alberta T2N 1N4
HOME PAGE: http://www.energylawprof.com/
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