Geoscience Reference
In-Depth Information
and ratifi ed the treaty. However, the Canadian energy market changed
dramatically in the following years, with rapid growth in production
from the Alberta oil sands. By 2009, Canadian emissions were 17 per-
cent above 1990 levels, far above its target. Finally, in December 2011,
Canada withdrew from the protocol. There were no adverse consequences
except for some scolding from environmentalists. The Canadian experi-
ence shows that the Kyoto Protocol had yet a further disadvantage of
being a toothless treaty, without sanctions or any mechanism for en-
forcement. In a deep sense, participation was voluntary.
8
How might international climate-change treaties introduce en-
forcement mechanisms? The only serious candidate would be to link
participation and compliance with international trade. For example,
countries that do not participate or live up to their obligations would be
subject to trade sanctions. The standard way to employ sanctions under
current international law is to put tariffs on the imports from countries
that are not complying with a treaty's provisions. This approach is com-
monly used when countries violate their trade agreements, and is also
included in several international environmental agreements.
9
Two specifi c approaches might be considered. The simplest one is to
impose a straight percentage tariff (perhaps 5 percent) on all imports
from the noncomplying country. This has the advantage of simplicity
and transparency, although it does not relate the tariff specifi cally to
the carbon content of the import.
A second proposal—more commonly promoted by scholars who
have advocated this enforcement mechanism—would put tariffs on
goods in relation to their carbon content. This mechanism is known as
“border tax adjustment.” Under this plan, imports into a country would
be taxed at the border by an amount that would be equal to the agreed-
upon international carbon price times the carbon content of the import.
Let's work through an example of the border tax adjustment ap-
proach. Suppose that the internationally negotiated minimum carbon
price was $25 per ton of CO
2
. Assume that noncomplying Canada ex-
ports a ton of steel to Europe. If calculations show that the ton of steel
has used 1.2 tons of CO
2
in its production, then Europe would levy a
