Article: Climate Clubs: An International Tax Law Perspective

Abstract

Global carbon pricing has often been portrayed as an interesting idea that will never be implemented due to political hurdles. Yet, this description is being challenged: growing political support for climate clubs suggests that a global carbon price might become reality in the future. This article investigates the conditions for the adoption and implementation of a climate club based on a global carbon price by comparing it to the international corporate tax club created by Pillar Two, which was also described as politically impossible a few years ago. This comparison highlights that establishing a climate club will require addressing design issues and institutional obstacles that might be even more complex than those that characterized the negotiations of the global anti-base erosion (GloBE) rules. Climate club, carbon border adjustment measures, global carbon price, global carbon tax, GloBE rules, inclusive forum on carbon mitigation approaches, inclusive framework, international corporate tax club, Pillar Two