Author: Basmah Alotaibi (LAW '26)

Market Failures: Pricing Carbon with Wishful Thinking

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Consider two numbers assigned to the same ton of carbon dioxide, each claiming scientific validity. The first: a figure between $1 and $7, representing the first Trump administration’s calculation of the societal damage caused by each ton of CO₂. The second: $190, representing the Biden administration’s calculation for that identical quantity of carbon. This metric, the social cost of carbon (SCC), is a single number meant to represent the total harm—from crop losses to health problems to sea-level rise—caused by emitting one ton of carbon dioxide. It has become a central battleground in U.S. climate policy. The usual explanation for this whiplash is political: one side follows science while the other ignores it. But that story misses a more fundamental problem. The first Trump administration didn’t need to deny climate science to gut the SCC—it simply exploited the metric’s built-in manipulability, using established government guidance to select assumptions that minimized the result. By changing just two parameters—the discount rate and geographic scope—the administration reduced the figure from $51 to between $1 and $7 per ton, …

China’s Climate Paradox

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China burns more coal than the rest of the world combined. It also manufactures more than 80% of the world’s solar panels and may have already peaked its emissions years ahead of schedule. It accounts for roughly a third of global CO₂ emissions—more than the United States, the European Union, and Japan combined. Yet under the United Nations Framework Convention on Climate Change (UNFCCC), the treaty that has governed international climate negotiations since 1992, it sits in the same legal category as Burundi, Somalia, and the Central African Republic: “developing.” That classification is not simply wrong. China’s per capita emissions remain well below those of the United States, and roughly a quarter of its population (some 350 million people) still lives in poverty by the World Bank’s measure. But the label is not adequate either. The UNFCCC’s binary framework (developed countries in one column, developing in the other) was never built to accommodate a country that belongs, however imperfectly, in both—and its governing principle, common but differentiated responsibilities (CBDR), offers no middle ground. Cass Sunstein’s …