Decarbonizing Trade: Reconciling Economic Integration with Climate Governance in a Fragmented Legal Order

The accelerating decarbonization of the global economy is transforming the relationship between international trade and climate governance. Yet the legal frameworks governing these domains remain fragmented, producing tensions between economic integration, climate ambition, and regulatory sovereignty. This article examines how states can reconcile trade liberalization with decarbonization without assuming that a single regulatory model is universally transferable. Through a comparative analysis of the European Union, the United States, South Africa, and Saudi Arabia, it demonstrates that contemporary approaches to decarbonizing trade reflect distinct combinations of carbon regulation, industrial policy, trade measures, and institutional governance. The analysis shows that legal fragmentation is not merely an obstacle to climate action: under certain conditions, it can permit differentiated and context-sensitive regulatory experimentation, while under others it can generate regulatory conflict, competitive distortions, and implementation gaps. The article develops a framework of adaptive climate-trade governance, under which jurisdictions combine common principles of carbon accounting, transparency, and regulatory coordination with differentiated instruments reflecting their economic structures, institutional capacities, and political constraints. The comparative analysis further demonstrates the importance of sequencing. The European Union's emphasis on carbon accounting, monitoring, and border adjustment, the United States' use of targeted industrial incentives, and South Africa's experience with phased carbon regulation illustrate different pathways towards trade-compatible decarbonization. Saudi Arabia provides a particularly important case of selective adaptation, demonstrating how a hydrocarbon-dependent economy can pursue decarbonization through a functionally differentiated framework rather than institutional transplantation. The article argues that the future of decarbonizing trade lies not in eliminating legal diversity, but in governing it through interoperable rules, credible carbon measurement, coordinated institutions, and progressively aligned climate-trade policies.