Domestic and International Strategies to Address Climate Change: An Overview of the WTO Legal Issues
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Description
This paper seeks to provide an overview of the issues of World Trade Organization (WTO) law that are raised by domestic and international policy strategies to address climate change. The paper also provides a non-exhaustive survey of, and commentary on, the existing literature that concerns these issues. Climate change, which has identifiable potentially catastrophic effects on the environment and human security in the broadest sense, cannot be halted, much less reversed, without the control and reduction of carbon dioxide (CO₂) emissions into the atmosphere. Current CO₂ levels in the atmosphere are higher than at any time in the last 450,000 years, and some analyses indicate that CO₂ levels are at their highest in twenty million years. Associated with a rise in CO₂ levels is a rise in global temperatures, and current projections by the Intergovernmental Panel on Climate Change (IPCC) suggest that without measures to reduce emissions, over the course of this century global average temperatures will increase by 1.8–4.0 °C.4 Rising temperatures are already causing Arctic ice to melt, glaciers to retreat and ocean levels to rise, threatening inhabitants of low-lying lands worldwide. Since these CO₂ emissions are, given current technologies, an inevitable byproduct of much of the energy consumed for transportation, industrial production, and domestic use, the challenge of halting and ultimately reversing climate change is an enormously difficult one. Several main international and domestic strategies have emerged and the paper will examine the WTO issues raised by each. The first strategy, exemplified by the Kyoto process, is to seek quantitative reductions in or caps on the level of emissions through binding international commitments of each state. Trade measures have been proposed by some commentators and officials as a means of pressuring non-participating states, especially the United States (US), to ratify the Kyoto Protocol, or at least to shoulder the share of the burden for reducing emissions that would be allocated to them under the principles of the Kyoto Protocol. The Kyoto process also envisages emissions trading as a way of efficiently achieving reductions in emissions, and the resulting carbon market raises General Agreement on Trade in Services (GATS) issues, since what is traded is arguably a financial instrument. A second and obviously complementary strategy to the Kyoto Protocol is to mandate the use of green or renewable energy, the consumption of which does not create CO₂ emissions, and/or to reduce the cost of such energy relative to conventional energy sources. Such mandates can raise WTO issues where they affect goods and services traded between WTO Members, as can subsidies, including fiscal measures, to reduce the cost of renewable energy. Moreover, the reduction of tariff and non-tariff barriers (such as idiosyncratic technical standards) on renewable energy and the technologies and equipment needed to produce it may make a significant contribution to lowering the cost of renewables relative to conventional energy sources. Finally, mandates to use renewable energy can be traded in the form of tradeable renewable energy certificates (TRECs) and the development of a global market in such instruments will be affected by the financial services and other relevant rules in the GATS. A third and also complementary strategy is that of energy efficiency. This can be achieved through product standards that specify a require performance level in terms of energy consumption. Subsidies may also be used to induce consumers and industrial users to switch to more energy-efficient goods, or adapt existing goods so as to make them more energy efficient. Again, where trade in goods and/or services is affected, WTO rules will be of relevance.
Source Publication
International Trade Regulation and the Mitigation of Climate Change: World Trade Forum
Source Editors/Authors
Thomas Cottier, Olga Nartova, Sadeq Z. Bigdeli
Publication Date
2009
Recommended Citation
Howse, Robert L. and Eliason, Antonia L., "Domestic and International Strategies to Address Climate Change: An Overview of the WTO Legal Issues" (2009). Faculty Chapters. 861.
https://gretchen.law.nyu.edu/fac-chapt/861
