Countries can take varying approaches to reducing greenhouse gas emissions. Since energy use is a significant source of greenhouse gas emissions, policies designed to increase energy efficiency or induce a switch to less greenhouse-gas-intensive fuels, such as from coal to natural gas, can reduce emissions in the short term. In the long term, however, major technology changes will be needed to establish a less carbon-intensive energy infrastructure. To that end, a U.S. policy to mitigate climate change may require facilities to achieve specified reductions or employ a market-based mechanism, such as establishing a price on emissions. Charts and tables.

Climate Change Trade Measures: Estimating Industry Effects

In anticipation of Senate deliberation on climate change legislative proposals, GAO was asked to examine how greenhouse gas emissions pricing could potentially affect the international competitiveness of U.S. industries, and to examine trade measures being considered as part of proposed U.S. climate change legislation. On July 6, 2009, we briefed ... covering: (1) what is known about estimating industry effects, (2) examples of industries that may be vulnerable to a loss in international competitiveness from emissions pricing, (3) trade measures and other approaches to address competitiveness issues, and (4) the potential international implications of trade measures. [This report is] copy of the slides presented at the briefing.

GAO examined the potential effects of greenhouse gas emissions pricing on U.S. industries' international competiveness and trade measures being considered as part of U.S. Legislative proposals to address climate change. GAO examined (1) what is known about estimating industry effects; (2) examples of industries that may be vulnerable to a loss in international competiveness from emissions pricing; (3) trade measures and other approaches to address competiveness issues; and (4) potential international implications of trade measures.