Trade and climate change policies have become increasingly interwoven. Subsidies for green industries often provoke tariffs, such as US actions over Chinese solar panels and electric vehicles. The European Union’s Emission Trading System (ETS) has set an increasingly high price on carbon emissions. But if high emission industries like steel, simply relocate and European consumers then buy the imported steel, this “carbon leakage” undermines the original policy. To tackle this problem, the European Union has introduced the Carbon Border Adjustment Mechanism (CBAM) which seeks to tax such imports to prevent carbon leakage – and to encourage other countries to also introduce carbon taxes. The UK is planning the same. But many countries are unhappy, claiming this is simply disguised protectionism.

To debate these issues, we bring together one of the designers of the CBAM, former MEP Luis Garicano, an LSE economic policy expert together with Maisa Rojas Corradi from Chile, a representative of the global South who potentially lose out from these policies. Catherine Wolfram who served in Joe Biden’s administration, will give a US perspective. The event will begin with opening remarks by Professor Robin Burgess, Professor Economics and Director of the International Growth Centre at LSE.

Meet our speakers and chair

Luis Garicano (@lugaricano) returned to LSE as a professor in the School of Public Policy. He started his academic career at the University of Chicago Booth School of Business, where he attained the rank of full professor in economics and strategy after 10 years on the faculty and then at LSE, where he was professor in economics and strategy at the departments of Economics and Management of and head of the Managerial Economics and Strategy Group; in addition, he has been visiting professor at other institutions, among others MIT, Columbia Business School and the London Business School. He has held positions as an economist of the European Commission and McKinsey & Company, where he has also held a named chair with the FEDEA foundation. 

Maisa Rojas Corradi (@Maisa_Rojas), Minister of Environment of Chile since 2022, is a physicist and holds a doctorate degree in atmospheric physics from the University of Oxford.

Catherine Wolfram is the William F. Pounds Professor of Energy Economics and a Professor of Applied Economics at the MIT Sloan School of Management. From March 2021 to October 2022, she served as the Deputy Assistant Secretary for Climate and Energy Economics at the U.S. Treasury, while on leave from UC Berkeley.

John Van Reenen (@johnvanreenen) is Ronald Coase School Professor at the London School of Economics and Digital Fellow, Initiative for the Digital Economy at the Massachusetts Institute for Technology (MIT). He is Director of the Programme on Innovation and Diffusion (POID) at LSE.

More about this event

This event will be available to watch on LSE Live. LSE Live is the new home for our live streams, allowing you to tune in and join the global debate at LSE, wherever you are in the world. If you can't attend live, a video will be made available shortly afterwards on LSE's YouTube channel.

Achieving a sustainable balance between human activity and the natural environment while maintaining economic growth will require innovation. We need to make economic growth cleaner, control environmental externalities, and protect human populations from environmental change. To identify and explore these innovations, LSE Environment Week brings together researchers from all fields of economics—including development, macroeconomics, industrial organisation, public, finance, labour, trade, urban, theory, behavioural, and political economy—as well as environmental, energy, and climate experts.

The Economics of Environment and Energy Programme (@STICERD_LSE), International Growth Centre (@The_IGC) and Programme on Innovation and Diffusion (@POID_LSE) within the LSE Department of Economics is convening LSE Environment Week in London from 23-26 September 2024. 

This is one of three public events during LSE Environment Week, the others are:

24 September - Innovative market solutions to confront climate change

26 September – Sewage in our waters

Hashtag for this event: #LSEEvents

Podcast & Video

A podcast of this event is available to download from Trade and climate change: managing policies on the road to net zero.

A video of this event is available to watch at Trade and climate change: managing policies on the road to net zero.

Podcasts and videos of many LSE events can be found at the LSE Public Lectures and Events: podcasts and videos channel.

Featured image (used in source code with watermark added): Photo by Tom Fisk: via Pexels.