Carbon Leakage versus Policy Diffusion: The Perils and Promise of Subglobal Climate Action

AbstractClimate change is a global problem that will ultimately require a concerted global response. Policy analysts, however, are divided about whether individual jurisdictions and groups of jurisdictions should take the initiative in the meantime. This Article argues in favor of subglobal efforts, both for their direct effects on emissions and their role as steps toward global cooperation. Some analysts argue that subglobal efforts are futile because of the problem of carbon leakage. More careful analyses, however, have shown that leakage is unlikely to pose a severe threat to the effectiveness of well-designed subglobal mitigation efforts. Policy design can manage leakage levels and prevent them from frustrating mitigation efforts. Moreover, mitigation efforts in one set of jurisdictions seem more likely to increase rather than decrease the likelihood of mitigation elsewhere. By building confidence among the key actors, subglobal actions can help pave the way for broader international cooperation. Indeed, without prior subglobal efforts, it is difficult to imagine a successful global agreement. Subglobal efforts are needed as confidence-building measures, providing a basis for mutual cooperation. Subglobal efforts are also needed to experiment with and improve policy instruments that can then be launched at the global level. In short, subglobal efforts are not only desirable but indispensable.Table of ContentsI. Introduction 360II. Subglobal Climate Efforts and Motives 363A. Climate Efforts in the US 363B. Other Developed Country Actions 365C. Developing Countries: The Case of China 367III. Leakage from Subglobal Efforts 368IV. Strategic Benefits and Costs of Subglobal Action 372V. Conclusion 378I. INTRODUCTIONClimate change is a global problem that will ultimately require a concerted global response.1 Policy analysts are divided, however, about whether individual jurisdictions and groups of jurisdictions should take the initiative in the meantime. This Article argues in favor of subglobal efforts, both for their direct effects on emissions and their role as steps toward global cooperation. But the issues are not simple.Critics argue that subglobal action is futile if not counterproductive. According to Eric A. Posner and David Weisbach, "local initiatives address the climate problem in an extremely inefficient way, and probably not at all."2 In their view, "[rjaising the cost of energy production or consumption in one city or state will predictably cause people and businesses to migrate to other states, where they can continue to pollute."3 Thus, they argue, subglobal climate action is symbolic rather substantive, meant to persuade the public that something is being done without paying the costs of genuine mitigation:4 "Symbols, not substance, have been the order of the day."5 In short, Posner and Weisbach say, "unilateral actions can have little impact on the problem, and so it makes sense to await a treaty rather than put in place expensive but unhelpful regulations."6This line of argument is supported by the matching principle, which holds that the level of governance should match the scale of die harm being regulated.7 In contrast, other writers reject the matching principle and forcefully advocate subglobal action, at least until a global regime is in place.8The dispute about the consequences of subglobal action is related to a normative debate about whether, in the absence of a climate treaty, major sources have a duty to reduce dieir carbon emissions.9 The answer to diat question may depend partly on an individual's moral framework, but in almost anyone's framework, die consequences of subglobal action will be relevant to assessing its ethical status. …