Global climate change due to the emission of anthropogenic, or manmade, greenhouse gases (GHGs) has the most widely dispersed costs of any transboundary environmental problem that the international community has yet faced. In other words, it is a global public problem and thus provides few incentives for unilateral or individual mitigation. This makes finding solutions difficult because international coalitions must face the problem of free-riders who benefit from reduced GHG concentrations at zero cost—those who make the economically rational decision to let others reduce atmospheric GHG concentrations while they continue to build GHG-intensive economies. Three of the primary complaints raised concerning BTAs for the costs of GHG regulation are (1) that an efficient methodology would be almost impossible to achieve, resulting in reduced economic efficiency, unreasonable transaction costs, and the potential for widespread systemic fraud; (2) that BTAs for greenhouse gases would not be in conformity with various international trade regimes that favor free trade, primarily those of GATT and the WTO; and (3) that BTAs are politically destructive because of their association with protectionist trade policies and their potential to destroy delicate negotiations toward cooperation on GHG emissions reductions. These concerns will be covered in the sections to follow.
M. Benjamin Eichenberg,
Greenhouse Gas Regulation and Border Tax Adjustments: The Carrot and the Stick, 3 Golden Gate U. Envtl. L.J.