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The document analyzes the shift toward concrete Climate-related Trade Measures (CTMs), such as carbon border adjustment mechanisms and deforestation regulations, and how these are being addressed within the WTO and UNFCCC. It highlights key concerns regarding transparency, interoperability, and the impact on developing nations, while positioning the WTO's MC14 as a critical moment for consolidating these discussions.

The briefing argues that as countries increase climate ambition and carbon pricing, carbon border adjustments (BCA) are becoming inevitable to prevent carbon leakage. To ensure these mechanisms remain environmental rather than protectionist, the author proposes specific principles—such as prioritizing leakage prevention over competitiveness and providing credits for equivalent foreign carbon pricing—and best practices regarding coverage, data standards, and appeal mechanisms. The author suggests the World Trade Organization (WTO) as the ideal multilateral forum for discussing these guidelines, specifically highlighting the 2021 Ministerial Conference (MC12) as a critical starting point.

The document outlines Spain's energy taxation system, primarily governed by the Hydrocarbon Tax (IEH) and the Special Tax on Coal, which are aligned with EU Directive 2003/96/EC. It details various tax subsidies, including reduced rates and exemptions for diesel in agriculture, professional transport, and aviation. To transition away from fossil fuels, Spain has implemented Law 7/2021, which prohibits new hydrocarbon exploration and mandates that new tax benefits for fossil fuels be justified by social or economic interest. The report also lists support mechanisms for renewables, such as the Recovery, Transformation and Resilience Plan and the PERTE ERHA, aimed at promoting green hydrogen, storage, and energy efficiency.

The EU has established a framework to phase out fossil fuel subsidies by 2020, including a legal obligation to end hard coal mining subsidies by 2018. While the EU has reduced its own direct budgetary support and some member states have implemented tax reforms, significant challenges remain. The document highlights a tension between official commitments and actual practice, noting that some countries may use transparency measures to avoid eliminating a broad range of subsidies. A significant portion of coal-related fiscal support in countries like Germany, Spain, and the Czech Republic has been redirected toward just transition measures for workers and site rehabilitation.

The report argues that environmental improvements can enhance competitiveness and proposes a strategy for a European eco-efficient economy based on resource efficiency, new technology markets, and stable global carbon pricing. It emphasizes the need for integrated governance, support for SMEs, and international cooperation to prevent carbon leakage and drive global climate action.

The report examines the environmental consequences of unsustainable lifestyles, particularly in industrialised nations, and explores the interplay between sustainable production and consumption. It evaluates accounting methods like Life-Cycle Assessment (LCA) and Multi-Regional Input-Output (MRIO) models to capture embedded emissions in trade, argues for an equitable global burden-sharing framework for climate mitigation, and analyses the psychological and institutional drivers of consumer behaviour. Key findings highlight the 'rebound effect' where efficiency gains are offset by increased consumption, and the potential of the 'functional economy' to reduce resource throughput via product lifetime optimisation and product-service systems.

The document provides a comprehensive analysis of carbon pricing mechanisms, specifically carbon taxes and emissions trading systems (ETS), within the Brazilian context. It evaluates international experiences, such as the EU ETS, to demonstrate that while short-term costs increase, long-term benefits include fostered innovation and business growth. The report details various macroeconomic studies on Brazil, suggesting that the negative impacts of emission restrictions can be minimized through revenue recycling and technological progress. It emphasizes the importance of Monitoring, Reporting, and Verification (MRV) and recommends that the Brazilian government establish a transparent climate governance structure. For companies, it suggests incorporating climate change into corporate strategy and adopting internal carbon pricing as a risk management tool.

The paper examines the use of trade measures in U.S. and EU climate policies, identifying objectives such as preventing carbon leakage and incentivizing global action. It argues that while protecting domestic industry is not a legitimate use of such measures under WTO and UNFCCC principles, properly designed measures to prevent emissions leakage may be permissible. The author highlights the American Clean Energy and Security Act (ACESA) as a proposal that could allow the U.S. to unilaterally determine the equity of other countries' emissions commitments, potentially conflicting with the UNFCCC principle of common but differentiated responsibilities. Given the high risk of WTO disputes, the paper recommends that the UNFCCC COP establish principles and procedures to limit the use of trade measures.

The paper examines how the U.S. and EU are considering trade measures to address industrial competitiveness, carbon leakage, and free-riding in their post-2012 greenhouse gas emissions legislation. It highlights a potential conflict between these unilateral measures and the principles of the WTO and UNFCCC, noting that U.S. proposals could penalize developing countries even if they comply with international agreements. The author argues that the UNFCCC Conference of the Parties should establish guiding principles for trade measures to prevent legal disputes and protect the UNFCCC's legitimacy as a global standard-setter.

The document argues that a low-carbon product standard for the U.S. steel industry, featuring an emissions intensity benchmark and tradable credits, can drive the adoption of abatement technologies. It recommends covering intermediate steel products (sheets, plates, bars, beams, pipes, and tubes) and including Scope 1, 2, and significant Scope 3 emissions in the benchmark. To prevent carbon leakage and protect competitiveness, the author suggests applying the standard to all steel products produced and sold in the U.S., including those from importers of upstream and downstream products. The paper emphasizes that while such a standard is a significant tool, a suite of complementary policies—including R&D funding, carbon pricing, and production tax credits—is necessary for full sector decarbonization.

The paper argues that the wind power industry is integrated primarily through foreign direct investment rather than trade, and that promoting global integration can reduce technology costs and foster innovation without sacrificing local job creation.

The document argues that a well-integrated carbon market in India can lower emissions reduction costs for industry and facilitate low-carbon transformation. It emphasizes that successful implementation requires tailored capacity building, iterative design through simulations and pilots, industry engagement, and complementary policies to mitigate competitiveness and distributional risks. The report suggests that a single framework could potentially subsume existing market-based mechanisms to improve administration and compliance.

The American Power Act (APA) proposes a comprehensive US framework to reduce greenhouse gas emissions through a mandatory cap-and-trade system, targeted emission reduction goals, and strategic investments in clean energy. The bill establishes a phased-in cap on covered gases, starting in 2013 and reaching an 83 percent reduction below 2005 levels by 2050. It includes specific provisions to expedite nuclear power development, deploy carbon capture and sequestration (CCS), and provide financial assistance to consumers and workers during the transition to a low-carbon economy. The APA also addresses international climate activities, including the use of international offsets and border adjustments to prevent carbon leakage.

The document argues for a tradable low-carbon cement standard in the United States that uses emissions intensity benchmarks to reward low-carbon producers and penalize high-emitters. It suggests that such a targeted approach could be more effective than economy-wide carbon pricing for the cement sector. The proposed standard would cover Scope 1 and Scope 2 emissions of CO2, CH4, and N2O per unit of clinker and mineral additives. Key design recommendations include starting the benchmark slightly below current average intensity, tightening it annually, and implementing price floors and ceilings for credits. The author emphasizes that this standard must be part of a broader policy suite, including innovation and demand-stimulation policies, to fully decarbonize the cement-concrete value chain.