...Stewart and I argued in our
book Reconstructing Climate Policy (2003), is through international allowance trading, with China receiving an implicit side payment in extra headroom allowances, and using these to trade back to the US and Europe in return for technology. Thus, the side payment would be delivered in myriad competitive private transactions, a much more cost-effective, and more politically palatable, approach; indeed, US firms would be selling technology to China in return for allowances obtained at lower cost than domestic US abatement. Finally, and perhaps most interestingly from...