Assessing the Achievements of the Copenhagen Accord: Trade, Climate Commitments, and Global Sustainability Impacts

Nations worldwide are concerned about climate change and the urgency of taking appropriate actions to control it. Due to the uncoordinated efforts being put in by different countries to tackle the crisis, there is an inefficiency in the actual results being achieved. One of the biggest problems involved is that of carbon leakage where unilateral emission reductions by a single nation can be offset by increasing emissions in other countries by shifting production activities. This paper stresses carbon tariffs as a tool to achieve sustainable development goals (SDGs) effectively. It explores the impacts of carbon tariffs proposed by the EU, across sectors by deriving a multi-sector gravity model and obtaining a decomposition of emission changes into various effects based on the source of the change. The authors also examined the influences of the commitments made by the nations who pledged under the Copenhagen Accord (2009) by comparing the committed and actual reductions in emissions. Carbon tariffs will make carbon-intensive production more expensive, and as the law of demand follows, polluters emitting less will benefit from it, thus opening the doors for sustainable production. The implementation of carbon tariffs may pose challenges, such as trade tensions, compliance with World Trade Organization (WTO) rules, and so on. Despite these concerns, carbon tariffs are increasingly seen as a necessary tool to promote sustainable trade and combat climate change by incentivizing cleaner production methods globally.