Design of an International Trade Law Compliant Carbon Border Tax Adjustment

Abstract

Many scholars have analyzed whether a border tax adjustment (BTA) on carbon would comply with the General Agreement on Tariffs and Trade (GATT). None, however, have presented the details of such a BTA. This paper consolidates the treaty arguments upon the design features of a border tax adjustment which is compliant with the General Agreement on Tariffs and Trade. I present the details of such a BTA and compare and contrast it with alternative BTA designs. Ultimately, a carbon BTA does not negate the need for international diplomacy and the presentation of the carbon BTA identifies some of what that diplomacy might involve.