The Carbon Loophole in Climate Policy

The report, “The Carbon Loophole in Climate Policy,” is an update to previous research that quantifies the amount of pollution associated with international trade. Industrial products such as steel, cement, and glass, and consumer products like food and clothing, are often manufactured in nations with lax pollution controls and then shipped to nations with aggressive climate targets — passing through a form of loophole that lets both parties off the hook for reducing the pollution that causes climate change.

The report’s authors find that policies such as California’s Buy Clean law can help shift capital flows to clean, low-carbon products and processes and help close the Carbon Loophole.