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One of the major obstacles toward mandatory limits on greenhouse gas emissions in the United States is the impact of such limits on the international competitiveness of U.S. firms. Limits on greenhouse gas emissions, be they in the form of regulation, a carbon tax or a cap-and-trade system, may impose extra costs on U.S. industries. This paper examines the advantages and disadvantages of including a competitiveness provision in future U.S. climate policy.