Border taxes on CO2
If a global emissions trading system is to be implemented, there needs to be a method of deterring free riders – countries that choose not to limit their own emissions. The obvious candidate is a border tax on embodied CO2 emissions. This possibility looks a lot closer with the EU considering trying it out for cement. The issue is unlikely to go away, and will no doubt cause huge ructions in WTO and similar bodies if it goes ahead. (via Dan Drezner).