The 2022 Inflation Reduction Act, President Joe Biden’s landmark climate law, is now expected to prompt a trillion dollars in government spending to fight climate change and trillions more in private investment. But the law and Biden’s broader “buy American” agenda include measures that discriminate against imports.

One year in, these policies, such as the law’s electric vehicle subsidies, appear to be succeeding at growing domestic clean energy industries – consider the US$100 billion in newly announced battery supply chain investments. But we believe the law also clearly violates international trade rules.

The problem is not the crime but the cover-up. Today’s trade rules are ill-suited for the climate crisis. However, simply tearing them down could hinder economic growth and climate progress alike.

If U.S. leaders instead take responsibility for forging an improved international trade system – rather than denying the violations of trade rules or pointing fingers at similar transgressions by trade partners – they could help put the global economy in a better position to weather increasing climate-related trade tensions.

Building, then violating WTO rules

The United States has shaped international trade rules more than any other country.

In the 1940s, the U.S. proposed rules that were eventually largely adopted as the General Agreement on Trade and Tariffs, or GATT, a series of multinational agreements to reduce trade barriers. The most ambitious of the GATT agreements was the U.S.-instigated Uruguay Round of the 1990s, which created the World Trade Organization.

Some WTO rules are vague, but others are crystal clear, including an unambiguous prohibition of subsidies contingent on the use of domestic products instead of imports. Certain provisions of the Inflation Reduction Act do exactly that, such as the electric vehicle subsidies that require a large percentage of parts to be produced in North America.

The choice facing U.S. policymakers was between accepting the Inflation Reduction Act, including its rule-breaking, protectionist elements, or missing the small window to pass federal climate legislation.

Sen. Joe Manchin (D-W.Va.) explicitly refused to provide the 50th vote needed to pass the law if it wasn’t to his liking, and among his asks was domestic sourcing requirements. More broadly, any meaningful climate legislation that does not support the local economies of fossil fuel-heavy regions may be dead on arrival in the U.S. Senate.

Without the Inflation Reduction Act, however, the U.S. had next to no chance of meeting its climate commitments, which would have dampened climate policy momentum across the world.

U.S. leaders might have been justified in begging for forgiveness after passing the legislation rather than asking for permission to violate trade rules. Instead, Sen. Ron Wyden (D-Ore.), who chairs the powerful Senate Finance Committee, said his team reviewed the international trade laws very carefully and found no violations.

Instead of an apology, U.S. leaders have said, “You’re welcome,” arguing that the subsidies will benefit other countries by accelerating the deployment of clean energy technologies and lowering costs.

While there is strong evidence to support this argument, it falls flat from a country that has failed to fulfill its obligations to take federal action on climate change for decades and just violated trade laws it has held others accountable to for so long. India’s power minister accused the West of hypocrisy, saying the Inflation Reduction Act’s protectionism will inhibit the energy transitions in developing economies.

The real concern: Rising protectionism

The Inflation Reduction Act contains a fundamental contradiction. Its promise to reduce global greenhouse gas emissions relies on the rapid diffusion of technologies, knowledge and finance across borders. Yet, its domestic subsidies may accelerate the adoption of trade barriers that inhibit these same cross-border flows, thus slowing progress on climate change.

Moreover, the investments it catalyzes will immediately benefit the U.S. economy, while the shared benefits of technological progress and emissions reductions will unfold over many decades for other countries. In the intervening years, other countries may respond with protectionist policies of their own.

Indeed, the real concern might not be the opening salvo, but the shootout of growing protectionism that ensues. For all its drawbacks, the growth in international trade since World War II has led to immense economic progress in much of the world, including the United States. The WTO and its predecessors have been instrumental in reducing harmful tariffs and providing a consistent set of trade rules to which countries are supposed to adhere.

The Biden administration is attempting to assuage these concerns by forging agreements that make more foreign producers eligible for Inflation Reduction Act subsidies. But, in our view, bespoke agreements with a handful of countries aren’t enough. A new vision is needed for international trade rules that support low trade barriers and “green industrial policies” alike.

An opportunity to modernize international trade

Global trade rules have not been updated in a generation. They are sorely in need of reform.

The usefulness of the WTO is contingent on most parties agreeing that its rules are worth following. Without a new working consensus and backing from the largest powers with effective vetoes, the organization will become irrelevant.

The first step to fixing the situation is to stop denying the problem or digging deeper holes, such as the United States’ ill-advised blocking of appointments to the WTO’s dispute settlement Appellate Body since 2017 to protest what it sees as overreach by the body.

More proactively, the U.S. can reestablish its commitment to trade rules by instigating a process to develop equitable reforms.

That could begin with a global summit to discuss the changes necessary to reflect new realities. High-level leadership from the United States would add considerable heft to the ongoing efforts to reform global trade rules.

Any fundamental rewrite of WTO rules will be a long and painstaking process. Instead, it may be sufficient to add a few clauses to existing agreements – like GATT Articles 20 and 21, which deal with exceptions to the trade rules – that clearly and transparently recognize that governments will need to nurture emerging domestic industries to cut emissions fast, ensure energy security and support vulnerable economies.

New rules could limit and define the appropriate use of green subsidies, carbon border tariffs, export and import controls and supply chain coordination. For example, the U.S. and other developed countries could agree to limit subsidies’ domestic sourcing requirements to only emerging, innovative clean technologies that require public support to commercialize. Building on this, all countries could work toward an explicit list of clean energy, transport and industrial technologies needed by all that can be traded with reduced or minimal tariffs.

Of course, these trade tools would have to be managed carefully to avoid proliferating and exacerbating tensions.

In the meantime, since U.S. leaders are already acting as if these rules exist, they’ll have to accept that other countries’ leaders may act similarly — a new Kantian Golden Rule for trade.

It may turn out that the United States did the world a favor by throwing off the shackles of outdated trade rules. That will depend on whether U.S. leaders take advantage of the opportunity to reframe the discussion around the country’s recent legislation as steps toward a modernized international trade regime that better aligns with the world’s climate goals.

The authors do not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.

Images of orange groves and Spanish-themed hotels with palm tree gardens filled countless pamphlets and articles promoting Southern California and Florida in the late 19th century, promising escape from winter’s reach.

This vision of an “American Italy” captured hearts and imaginations across the U.S. In it, Florida and California promised a place in the sun for industrious Americans to live the good life, with the perfect climate.

But the very climates that made these semitropical playgrounds the American dream of the 20th century threaten to break their reputations in the 21st century.

In California, home owners now face dangerous heat waves, extended droughts that threaten the water supply, and uncontrollable wildfires. In Florida, sea level rise is worsening the risks of high-tide flooding and storm surge from hurricanes, in addition to turning up the thermostat on already humid heat. Global warming has put both Florida and California at the top of the list of states most at risk from climate change.

My books and research have explored how these two states were sold to the U.S. public like twin Edens. Today, descendants of those early waves of residents are facing a different world.

Selling semitropical climates

As railroads first reached Southern California and the Florida peninsula in the 1870s and 1880s, land, civic and newspaper boosters in each state worked to overturn beliefs that people only thrived in colder climes. In the decades after the Civil War, white Americans living in the North and Midwest had to be persuaded that sun-kissed climates would not do them more harm than good.

Employed by the transcontinental railroads, influential writers like Charles Nordhoff contested eastern notions of Southern California as barren desert where “Anglo-Americans” would inevitably succumb to the “disease” of laziness.

Challenging persistent ideas of a malarial swampland, promoters in Florida, including the state’s own Bureau of Immigration, similarly put a growing emphasis on climate as a vital resource for fruit growers and health seekers.

Climate became integral to California’s and Florida’s growing reputation as idealized U.S. destinations. Moreover, it was deemed unlike other natural assets: an inexhaustible resource.

Tourists and settlers gave weight to these claims. “The drawing card of Southern California,” a tourist from Chicago visiting Pasadena wrote in the Chicago Tribune in 1886, “is the beautiful, even climate.” Peninsula Florida was “blessed by nature with a semi-tropical climate,” a visitor wrote in the Atlanta Constitution in 1890. He saw its destiny to attract those who would “bask in the sunlight of a genial clime.”

This proved a compelling vision. In the 1880s, both Southern California and eastern Florida saw booms in settlement and tourism. Southern California’s population more than trebled during the decade to over 201,000, while peninsular Florida’s doubled to over 147,000.

Affluent white Americans weighed up the merits of each: for citrus-growing, winter recuperation, land investment. The differences were, of course, numerous. One state was western, the other southern; one more mountainous, the other flat. Some boosters critiqued their subtropical rival’s climate.

Southern California was too arid, a writer in the Florida Dispatch claimed, a desert “parched for want of water.” Florida, meanwhile, had too much of the stuff, editorials in California replied: a wetland fit for reptiles but potentially deadly to new residents who would wilt in its torrid summers.

Yet Southern California and Florida became connected through economic futures founded upon climate promotion and related industries of citrus, tourism and real estate. If rivals, they shared distinct market ambitions.

“California and Florida can [together] control the citrus trade,” the Los Angeles Times declared in 1885, arguing for mutual benefits in the promotion of oranges. The pair had much to gain from persuading Americans to eat their fruit.

Developers in both also changed the landscape by rerouting water to create communities in once-inhospitable places. In California, the spread of irrigation to turn “desert into garden” enabled the growth of citrus towns such as Riverside, while vast aqueducts conveyed water to thirsty cities like Los Angeles.

In Florida, flawed schemes sought to “reclaim” – essentially drain – wetlands, including the Everglades, where boosters like Walter Waldin sold Americans on a once-in-a-lifetime “opportunity to secure a home and a livelihood in this superb climate.”

An inexhaustible resource

The roaring ‘20s saw a new influx of sun-seeking, automobile-driving Americans drawn by boosters to the beaches and orange groves of Los Angeles County and South Florida.

Comparing Florida and California had become a national pastime as popular as mahjong and crossword puzzles, according to Robert Hodgson, a subtropical horticulturist at the University of California, in 1926.

Hodgson traveled to Florida to act as a judge at an agricultural show in Tampa where, the Los Angeles Times reported in a dig at Florida, he visited everything “from the dizziest pink stucco shore subdivision to the latest aspiring farming colony reclaimed from the alligators.”

Snipes aside, climate and the lifestyle they offered to middle-class Americans set Southern California and Florida apart. Hodgson wrote that they were similarly “blessed by the gods” through a “joint heritage of something like 90% of the subtropical climatic areas of the United States.”

Climate, moreover, was unlike other natural resources. Whereas precious metals or forests could be mined or cut down, climate was different: an infinite resource. It “can never be exhausted by man in his ignorance or cupidity,” he explained.

Climate as crisis

This history of climate-based advertising puts into stark relief the challenges faced by California and Florida in the era of climate crisis.

Today, both confront recurring natural disasters that are exacerbated by human-caused climate change: wildfires in California, hurricanes and flooding in Florida, and increasingly dangerous heat in both.

Extensive home-building in wildfire and coastal zones has compounded these risks, with insurance companies now refusing coverage for properties at risk of fires or storm damage, or making it prohibitively expensive.

Once marketed successfully as the United States’ two semitropical paradises, Southern California and Florida now share disturbing climate-influenced futures.

These futures bring into question how historic visions of economic growth and the sun-kissed good life that California and Florida have promised can be reconciled with climates that are no longer always genial or sustainable.

Henry Knight Lozano received funding from the United Kingdom's Arts and Humanities Research Council (AHRC) as part of this research project.

Canada’s seemingly endless wildfires in 2023 introduced millions of people across North America to the health hazards of wildfire smoke. While Western states have contended with smoky fire seasons for years, the air quality alerts across the U.S. Midwest and Northeast this summer reached levels never seen there before.