Predominant climate club research emphasizes state-centric clubs that alter the incentive structure and bargaining context for climate cooperation. This focus on national governments, however, leaves climate clubs vulnerable to political turbulence afflicting individual club members. Subnational governments are an important yet often overlooked type of actor in the club literature. This article contributes to understanding the role and nature of subnational government-led clubs in transnational climate governance and lawmaking through qualitative case studies of the Western Climate Initiative and the C40 Cities Climate Leadership Group. I identify the distinguishing characteristics that these clubs manifest in their membership and functions, as formalized through legal arrangements. I demonstrate that these clubs have the potential to increase structural stability, withstand political changes, and enhance the legitimacy and efficacy of climate action. They do so by functioning not only as organizations that create incentives for committing to legal norms and mechanisms for deterring free riding but also as communities of practice that generate shared understandings, resources, and norms to sustain club cooperation in pursuing a shared commitment to climate action. As such, each club applies a mix of rationalist approaches to benefit generation and constructivist approaches to community building.

This article examines a significant question in navigating trade and climate tension: how to recognize another country as having equivalent climate regulations. Such equivalence forms a core component of many proposed models of so-called climate clubs. Establishing equivalence between distinct national climate regulation regimes poses a unique challenge that draws upon both trade and environmental international cooperation. Drawing on existing proposals, I examine prospects for country-based cooperation through three models: ETS-linking, benchmarking of shared methods and minimum standards, and benchmarking of outcome duties. The analysis concludes that all models necessitate some trade-offs between the goals of rigorous oversight of climate objectives, inclusivity, and WTO compliance. Benchmarking of shared methods and minimum standards seems most feasible, and would provide a deeper level of integration between trade and climate cooperation, but necessitates a shift in how countries, particularly the EU, oversee regulatory compliance.

With its narrow focus on price-based policies and ‘explicit’ carbon prices, the EU carbon border adjustment mechanism (CBAM) aims to prevent carbon leakage by ensuring that imported products ‘bear’ the same exact economic costs ‘borne’ by EU products. The proposed US border carbon adjustment (BCA) and the recent proposal for a global steel and aluminium arrangement (GSAA), by contrast, reflect a broader focus on environmental equivalence and recourse to punitive or quasi-punitive remedies. All recently proposed carbon border measures suffer from specific limitations. Further, albeit to a different extent, they are all associated with problematic aspects in terms of WTO law compatibility. This research note enquires whether the GSAA could be fine-tuned at the regulatory design stage in such a way as to provide an environmentally effective and WTO law compatible way forward. The analysis illustrates that recourse to an installation-based approach, emission limit values and product standards would achieve these goals. Nonetheless, the implementation of this ambitious strategy would be fraught with political obstacles.

Although the Paris Agreement arguably made some progress, interest in supplementary approaches to climate change co-operation persist. This article examines the conditions under which a climate club might emerge and grow. Using agent-based simulations, it shows that even with less than a handful of major actors as initial members, a club can eventually reduce global emissions effectively. To succeed, a club must be initiated by the ‘right’ constellation of enthusiastic actors, offer sufficiently large incentives for reluctant countries and be reasonably unconstrained by conflicts between members over issues beyond climate change. A climate club is particularly likely to persist and grow if initiated by the United States and the European Union. The combination of club-good benefits and conditional commitments can produce broad participation under many conditions.