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In addition, the imposition of carbon border adjustments would require the estimation of the direct carbon content of imports, the total embodied carbon, including input in the value chain, or the content of comparable domestic goods (Burniaux et al., 2010, p.5). In the face of this, a rough approximation of the appropriate level could be an attractive alternative, but crudely calculated adjustments work less well at correcting leakage, and they are also susceptible to political manipulation: a convenient tool for protectionism. Even carefully calculated carbon border adjustments, however, are susceptible to manipulation, either for reasons of improvement of the terms of trade or for enhancing climate mitigation.(Barrett, 2003, p.388) In this regard, carbon border adjustments are facing a variety of legal complexities for the provision of long-term climate change prevention. As an alternative to this carbon adjustments might compensate for lacking international legislation, contributing to a regulatory patchwork that should give priority to first-best legal arrangements, not second-best trade measures.

“It’s the end of the world as we know it,” or Polycentric Risk Regulation R.E.M., the American rock band, named one of their songs: It’s the end of the world as we know it (and I feel fine). Reconsidering the regulatory framework for the mitigation of carbon dioxide emissions, one has to admit – without feeling fine – that both the increase of greenhouse gas emissions and the global rise in temperature are in fact questioning common narratives of the state, the market, Moritz Hartmann and the regulation of societal risks. Therefore, transboundary architectures to provide effective regulatory conditions for the reduction of CO2 emissions are challenged by asymmetric market conditions, heterogeneous administrative capacities, and a multitude of national policy preferences on how to regulate the risk of global climate change. Rather than waiting for a holistic global effort in a world of 200 nation states (in which legal fragmentation describes the regular evolution of laws), polycentric approaches are perceived as referring to promising policy constellations. These seem to offer the benefits of microcultural, microeconomic and microregulatory insights at multiple scales. In addition, polycentric cooperation enhances experimental governance and encourages learning from a variety of different policy set-ups, allowing for the assessment of methods, benefits, and costs of particular strategies adopted in different ecosystems (Ostrom, 2009, p.31; Homeyer, 2010, pp.121– 150; Sabel and Zeitlin, 2008, pp.271–327; Hutter, 2010, pp.3–23). In that sense, the Cities for Climate Protection (CCP) initiative has been recognized as an instrumental tool for the initiation of local mitigation and adaptation actions in both developed and developing countries, and for providing key input in global climate advocacy efforts of cities and local governments (ICLEI, 1995). The regionalization of climate change policies could therefore provide the regulatory arena in which the pillars of supranational legislation and polycentric risk governance are emerging.

Despite this, polycentric regulation must be complemented by the classical collective action theory, which predicts that individuals will not change their behaviour and reduce extensive resource usage unless external authorities impose enforceable rules, which change the incentives faced by those involved (Hutter, 2010, p.5).

Therefore, rather than changing institutions at global levels, a forum for the development of a transnational rule of law may provide coherence between private and public, national and international, levels of governance for the benefit of citizens (Petersmann, 2012b).

As global governance can be understood as the globalization of local governance, what may be termed its genetic code inherently requires leadership, legitimacy and efficiency. Therefore, only a ‘four-stage sequence’ (Rawls) of constitutional, legislative, administrative and judicial arrangements of rules, principles, and institutions can allow for polycentric policy mechanisms counteracting “the end of the world as we know it” on a global scale (on the ‘four-stage sequence’, see Rawls, 1971, p.195; see for the three elements of governance, Lamy, 2012).

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