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There are many possible ways for this to be accomplished. One promising way would be to create a cap and trade system that included both the United States and Canada. Your question implies that Canadian firms are not burning as much coal and therefore are not emitting as many chemicals. In a cap and trade system, they would be able to profit from their lower emissions by selling the right to emit to the US companies. At the same time, the US companies would have economic incentives to reduce their emissions. This, then, is one way to resolve this dispute.
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