A WTO-Compatible Climate Club That Solves Our Climate Problem

The authors propose a WTO-compatible 'climate club' designed to overcome the free-rider problem of the Paris Climate Agreement by using reciprocal commitments, substantial penalties, and financial incentives to drive global net-zero emissions by 2050.

• The authors argue that the Paris Climate Agreement has failed to reverse carbon dioxide emission growth—which hit 37.6 billion metric tonnes in 2024—because its "name and shame" strategy does not address the fundamental free-rider problem of international climate policy.
• The proposed climate club requires members to commit to net-zero CO2 emissions by 2050 with five-year intermediate goals, utilizing any WTO-consistent regulatory approach. To enforce this, the club would impose high progressive import tariffs and export taxes on carbon-intensive products from non-members, as well as a uniform tariff surcharge of up to 10% on non-member imports, excluding products that contribute to environmental sustainability.
• To support developing countries, the proposal includes a Multilateral Fund funded voluntarily by developed nations. Developing countries with per capita CO2 emissions below a specific threshold can access these funds, may be permitted a net-zero goal of 2055, and may see adjusted tariff penalties; however, these accommodations do not apply to the largest CO2 emitters.
• The authors assert the club is compatible with existing WTO laws under GATT Articles XX(b) and XX(g), which allow measures for the "conservation of exhaustible natural resources." They cite the EU—Palm Oil (Indonesia) case to support the claim that GHG emission limits contribute to resource conservation, and the US—Shrimp case to justify allowing alternate regulatory regimes.
• The proposal distinguishes itself from other models by avoiding a mandatory minimum carbon price, which the authors argue creates economic distortions and political resistance. They also argue that the European Union's carbon border adjustment tax (CBAM), implemented in 2026, is insufficient on its own to induce global carbon reduction or fully offset carbon leakage.

APA

Mavroidis, P. C., & Tarr, D. G. (2026). A WTO-Compatible Climate Club That Solves Our Climate Problem. Forum on Trade, Environment, & the SDGs. https://tessforum.org/latest/a-wto-compatible-climate-club-that-solves-our-climate-problem

Chicago

Mavroidis, Petros C., and David G. Tarr. A WTO-Compatible Climate Club That Solves Our Climate Problem. Forum on Trade, Environment, & the SDGs, 2026. https://tessforum.org/latest/a-wto-compatible-climate-club-that-solves-our-climate-problem.

Wikipedia

{{cite report |last1=Mavroidis |first1=Petros C. |last2=Tarr |first2=David G. |title=A WTO-Compatible Climate Club That Solves Our Climate Problem |publisher=Forum on Trade, Environment, & the SDGs |date=1 May 2026 |url=https://tessforum.org/latest/a-wto-compatible-climate-club-that-solves-our-climate-problem |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{mavroidis2026wtocompatible, author = {Mavroidis, Petros C. and Tarr, David G.}, title = {{A WTO-Compatible Climate Club That Solves Our Climate Problem}}, institution = {Forum on Trade, Environment, \& the SDGs}, year = {2026}, month = may, url = {https://tessforum.org/latest/a-wto-compatible-climate-club-that-solves-our-climate-problem}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }