A WTO-Compatible Climate Club That Solves Our Climate Problem

The authors argue that the Paris Climate Agreement's 'name and shame' approach fails because it ignores the science of cooperative agreements on common resources. They propose a climate club where members commit to net-zero CO2 emissions by 2050, using a combination of high import tariffs and export taxes on non-members, a uniform tariff surcharge (up to 10%) on non-member imports, and penalties for members who miss intermediate goals. To ensure WTO compatibility, the proposal relies on GATT Articles XX(b) and XX(g), allowing any regulatory approach that achieves emissions reductions. The plan includes a Multilateral Fund for developing countries and suggests similar structures for methane and nitrous oxide, drawing inspiration from the Montreal Protocol.

• The authors contend that the Paris Climate Agreement has failed to reverse carbon dioxide emission growth, which hit 37.6 billion metric tonnes in 2024, because it does not address the 'free-rider problem'.
• The proposed climate club requires members to commit to net-zero CO2 emissions by 2050 with five-year intermediate goals, utilizing trade penalties including high progressive import tariffs and export taxes on carbon-intensive products from non-members, and a uniform tariff surcharge of up to 10% on non-member imports.
• To support developing countries, the proposal includes a Multilateral Fund funded by developed countries; access requires membership in the club and per capita CO2 emissions below a specific threshold.
• The authors argue the club is compatible with WTO laws via GATT Articles XX(b) and XX(g), which allow measures for the conservation of exhaustible natural resources, provided they are not arbitrary and allow for alternative regulatory regimes.
• The proposal distinguishes itself from Nordhaus's climate club by avoiding the need for WTO amendments and from the EU's Carbon Border Adjustment Mechanism (CBAM) by implementing more significant penalties to induce global carbon reduction.

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} }