Competitiveness, Leakage and Comparability

This research paper analyzes proposed trade measures in U.S. and EU draft climate policies intended to address competitiveness, carbon leakage, and free-riding, while evaluating their compatibility with WTO and UNFCCC principles.

• Draft climate legislation in the United States and considerations in the European Union have included trade measures to achieve three primary goals: protecting domestic industry from competition (competitiveness), preventing the relocation of polluting industries overseas (leakage), and penalizing entities that do not join future climate agreements (free-riding).
• The World Trade Organization (WTO) and the United Nations Framework Convention on Climate Change (UNFCCC) do not authorize trade measures for protecting domestic industry and both discourage unilateral trade measures that are disguised restrictions on trade, arbitrary, or unjustifiable.
• Current U.S. proposals could result in trade measures being applied to developing country Parties that are in full compliance with a post-2012 international climate agreement if the U.S. deems their policies not "comparable" to its own, potentially leading to WTO disputes that could undermine the UNFCCC's legitimacy.

APA

World Resources Institute (n.d.). Competitiveness, Leakage and Comparability. https://www.wri.org/research/competitiveness-leakage-and-comparability

Chicago

World Resources Institute. Competitiveness, Leakage and Comparability. n.d. https://www.wri.org/research/competitiveness-leakage-and-comparability.

Wikipedia

{{cite report |author=World Resources Institute |title=Competitiveness, Leakage and Comparability |url=https://www.wri.org/research/competitiveness-leakage-and-comparability |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{worldresourcesinstitutendcompetitiveness, author = {{World Resources Institute}}, title = {{Competitiveness, Leakage and Comparability}}, institution = {World Resources Institute}, url = {https://www.wri.org/research/competitiveness-leakage-and-comparability}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }