This article explores emission units as a linkage in climate clubs in the hope of making a remarkable difference in climate change mitigation. It analyzes emission units trading in the context of regional trade agreements as a novel, promising, and effective way to mitigate climate change. It then examines Article XX of the General Agreement on Tariffs and Trade (GATT) as a potential and encouraging remedy for the development of climate clubs. Specifically, it explores the scope of application of Article XX and investigates to what extent it can be applied to climate concerns. It then provides an analysis of climate- club measures according to the jurisprudence of the World Trade Organization on GATT Article XX.
This article concludes that, unless there is significant reform in the current laws, policies, and actions regarding climate change, the global levels of green-house gas emissions will continue to increase. As a response to this problem, many countries have enacted regulatory measures and economic incentives to mitigate climate change at the national level. One of them is emissions trading schemes, in which carbon has been given a price and the environmental externality of the industry is internalized with this pricing mechanism. However, these national-level carbon pricing mechanisms create the risks of carbon leak-age, reduction of competitiveness of their industry, and free-riding in the countries that have no climate-change mitigation measures.

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