H O W D O W E D E V E L O P A S O U N D D O M E S T I C
G R E E N H O U S E G A S E M I S S I O N R E D U C T I O N P O L I C Y
T H A T E F F E C T I V E L Y R E D U C E S A T M O S P H E R I C
C A R B O N D I O X I D E , P R E S E R V E S D O M E S T I C
C O M P E T I T I O N , A N D I S C O M P L I A N T W I T H
I N T E R N A T I O N A L L A W ?
Christopher Byrd
Tallahassee Group Leader
Cbyrd.law@gmail.com

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World Trade Organization
Regulates trade between participating countries
Provides a framework for negotiating and formalizing trade agreements
Provides dispute resolution process to enforce WTO agreements ratified by member governments
WTO replaced the GATT (General Agreement on
Tariffs and Trade) in 1995
Original GATT text still in effect under WTO policy, with 1994 modifications

 U.S. and Canada are participating members of WTO, therefore bound by WTO agreements
 Limits imposed by WTO on trade agreements between member countries and domestic policies that may hinder these trade agreements
 Climate legislation containing competitiveness
provisions are under WTO scrutiny

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Measures implemented in specific legislation to ease concerns of losing trade advantages internationally
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“Leveling the Playing Field”
Examples
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EU: allocates emissions allowances to GHG intensive and trade-exposed domestic manufacturing industries at no cost:
International Reserve Allowance Program
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Australia: The Jobs and Competitiveness Program under the
Clean Energy Legislation safeguards industries that conduct trade-exposed activities and have the most significant exposure to a carbon price, it is to provide $9.2 billion in assistance between 2012 and 2015. (No BTA)

 F&D policy applying to imports could be framed as a permissible
Border Tax Adjustment: is charged as an extension or equivalent to the charge imposed on domestic products subject to
F&D
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Impose similar cost on imports
Must not discriminate imports against domestic products or discriminate imports from one country over another

 Examples of Discriminatory charges:
 arbitrary charges
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 charges that favor a country’s imports over another country’s protectionist charges: charges that favor domestic products over imports
 F&D can pass WTO scrutiny if the BTA is not discriminatory

 BTA seen as discriminatory could still be allowed under the Environmental Exceptions rule:
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Article XX of GATT (Section VI)
 If the BTA “relat[es] to the conservation of exhaustible natural resources if such measures are made effective in conjunction with restrictions on domestic production or consumption” (F&D)

 The F&D BTA should:
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Consider local conditions in foreign countries
Include countries’ efforts to curb climate change
Consider level of economic development in countries
 Environmental justifications for F&D BTA
Competitiveness Provision:
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Internalize social and external costs of carbon pollution
Account for emissions migrations
Enable countries to make greater emissions cuts
Provide incentives for countries to join in international efforts to curb emissions

 A Carbon Equalization System necessary to level the international playing field by imposing the same or similar costs on imports as F&D policy would impose on domestic products and possibly exempting
exports (“Linkage”)
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If domestic producers lose their competitive edge, they may
“outsource” production to nations with unregulated GHG emissions (“ Leakage ”)
Keeps the carbon price signal up, in a consistent and predicable manner
Accounts for international progress under the UNFCCC, the
G8 or the Major Emitters Forum

State
E.U.
India
Germany
U.K.
Italy
France
Australia
Spain
Poland
Tax -
Cap & Trade
Or Tax applies to coal (domestic and imported) at the rate of Ruppies 50 (~USD 1) per ton
C&T and Tax applies to commercial and public energy use
(electricity, gas, solid fuel and liquefied gases)
C&T
C&T
Tax -
C&T
C&T shift to cap-and-trade after 2015
C&T
C&T
Most relevant legislations
2009 Climate and Energy Package:
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Emissions trading schemes
Effort Sharing Decision, aims to reduce GHGs emissions from sectors not included in the EU ETS such as transport, buildings, agriculture
 and waste
Promotion of the use of renewable energy - Carbon capture and storage
2007 Ethanol Production Incentives
2008 National Action Plan on Climate Change
2010 Post ‐ Copenhagen announced domestic actions
2007, 2008 Integrated Climate and Energy Programme
2010 Energy Concept for an Environmentally Sound,
Reliable and Affordable Energy Supply
2009 Renewable Energy Sources Act (RESA)
2001 Climate change levy
2008 Climate Change Act
2010 Carbon Reduction Commitment Energy Efficiency Scheme
2010 Feed ‐ in Tariffs for renewable electricity
2007 Climate Change Action Plan
2002 Strategy to Cut National Greenhouse Gas Emissions
2009 Framework Law for the implementation of the "Grenelle de l'environnement" (Law Grenelle 1)
2010 Law Grenelle
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2012 Clean Energy Legislative Package adopted these 2011 laws:
 Clean Energy Act
Clean Energy Regulator Act
Climate Change Authority Act
Clean Energy (Consequential Amendments) Act o Dealing with charges under the carbon pricing mechanism.
Law 13/2010 amending Law 1/2005
 Regulation of trade of greenhouse gas emission allowances
2001-2012 Spanish Strategy of Climate Change and Clean Energy
2008-2016 Gas and Electricity Planification
2002-2032 Spanish Forestry Plan
2001 Environmental Protection Law
2030 Polish energy policy until 2030

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Cost of implementation - Competitiveness
Carbon Footprinting – imports v. exports
Others?

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Joost Pauwelyn, U.S. Federal Climate Policy and
Competitiveness Concerns: The Limits and Options of
International Trade Law
Nichole Hines, Vy Huynh, Yuni Kim, International
Harmonization of Carbon Pricing: A Proposal for the
U.S., Geneva Graduate Institute (2012)
Slayde Hawkins, Skirting Protectionism: A GHG-Based
Trade Restriction Under the WTO, 20 Geo. Int'l Envtl. L.
Rev. 427 (2008)
Paul-Erik Veel, Carbon Tariffs and the WTO: An
Evaluation of Feasible Policies, 12 J. Int'l Econ. L. 749
(2009)