In terms of WTO law, it would be extremely difficult, for example, to qualify a country’s failure to adopt climate legislation as a “subsidy” or environmental “dumping”. If China does not impose climate legislation in the first place, it is hard to speak of either a subsidy or dumping.
Better options would be to justify a carbon levy on imports as “border tax adjustment” or, better still, to excuse it directly under the environmental exception in GATT Article XX(g).
It’s far from easy, but Pauwelyn thinks that “a carbon levy on imports, when designed carefully, can survive WTO scrutiny.”
UPDATE: Bhagwati and Mavroidis have an article on this topic in the latest issue of World Trade Review. They reach similar conclusions on the legality of various instruments, but argue against imposing such a carbon levy. Thank you to Stephanie Switzer in the comments for the pointer.