This paper assesses the economic effects of global climate policies on external adjustment. Various climate policies could have substantially different impacts on external balances over the next decade. A credible and globally coordinated carbon tax would decrease current account balances in greener advanced economies and increase current accounts in more fossil-fuel-dependent regions, reflecting a disproportionate decline in investment for the latter group. Global interest rates would fall over time with increases in the carbon tax due to the fall in global investment.