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Under what conditions should epistemic institutions (institutions that provide policy-relevant scientific advice) be integrated into international legal institutionsfor example, the Conference of the Parties to the United Nations Framework Convention on Climate Change? Following work in law and economics on the theory of the firm, this article argues that where states will not implement environmental policies absent a collective decision to do so, greater hierarchical control of epistemic institutions by legal institutions may be necessary to ensure the credibility and availability of a usable scientific record. Hierarchy creates credibility because it allows all states necessary for cooperation in the legal institution to oversee the production of the scientific record that provides the basis for international legal rules. Hierarchy thus enhances the effectiveness of international law as a coordination tool, even at the expense of the autonomy of the scientific process. By contrast, where collective action is not necessary because states will unilaterally regulate an environmental problem once scientific uncertainty has been reduced, epistemic and legal institutions should be fragmented to ensure the unbiased production and dissemination of scientific information. In such situations, the credibility of the scientific record is demonstrated by decentralized adoption of science-based regulation.

This article offers the justification for a type of carbon customs union in which countries with a diverse range of high-ambition domestic climate measures would adopt a common external tariff on carbon intensive imports from countries outside the union. We explain why any pragmatic approach to carbon border measures (CBMs) is likely to create problems under prevailing interpretations of the World Trade Organization's (WTO) primary rules. Given the urgency of the climate crisis and the fact that the legality of a CBM – no matter how designed – will be a question of first impression for any WTO dispute panel, WTO consistency should take a backseat to considerations of domestic legal and political feasibility in designing a CBM. Instead of trying to fit a CBM into current understandings of WTO rules, WTO members should renegotiate WTO rules to permit a range of aggressive, but likely trade-restrictive, decarbonization measures. Having said that, we also recognize that WTO negotiations may take longer than optimal from a decarbonization standpoint. We therefore suggest an approach that would allow WTO members to take advantage of flexibilities that existing WTO rules afford.

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