But if the other advanced nations had a stick — a tariff of 4 percent on the imports from countries not in the “climate club” — the cost-benefit calculation for the United States would flip. Not participating in the club would cost Americans $44 billion a year.
This sort of approach offers perhaps the best chance of preventing a climatic upheaval.
In an article published in April in The American Economic Review, Professor Nordhaus proposed just such a climate club, in which countries committed to reducing carbon emissions would impose a uniform tariff on imports from nonmembers.
Even if they agreed on a carbon price of as much as $50 a ton — which is consistent with the White House’s estimates of the overall costs imposed by climate change on society — a fairly low external tariff could induce near-universal participation in the club.
For more, see Climate deal badly needs a big stick.