Climate Change: EU and Proposed U.S. Approaches to Carbon Leakage and WTO Implications [April 12, 2010]   [open pdf - 1MB]

"This report examines the dynamics of this issue in three parts. First, the European Union (EU) has been implementing a cap-and-trade program for four years, and has finalized a third reduction phase that will run from 2013 through 2020.4 This report reviews and analyzes the experience of the EU in addressing its concerns about energy-intensive, trade-exposed industries, and the lessons those efforts may have for the United States. Second, the House-passed American Clean Energy and Security Act of 2009 (H.R. 2454) contains both a free allocation scheme and a border measure among its provisions to address the concerns of energy-intensive, trade-exposed industries. This report reviews and analyzes these provisions. Third, these same provisions could come under scrutiny under various U.S. trade agreements, particularly within the World Trade Organization (WTO). Concerns have been expressed that the border measure contained in H.R. 2454 would be suspect under various provisos of the WTO. This report analyzes the potential WTO implications of any attempt to implement a subsidy or a border measure under H.R. 2454."

Report Number:
CRS Report for Congress, R40914
Public Domain
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