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The WTO permissibility of border trade measures in climate change mitigation

Westberg, Johan LU (2010) JURM01 20101
Department of Law
Abstract
The purpose of this thesis is to examine the permissibility of border trade measures undertaken with a climate change rationale under the current regulatory environment of the WTO. Three interconnected angles regarding such permissibility have been examined. An overview was made of the current WTO regulation with regards to its potential impact on climate motivated border measures. This section found that WTO law in several cases leave potential room for approval for border measures undertaken with an environmental purpose such as climate change. However, it was also found that considerable uncertainty still remained regarding hard application of many of these rules. The very sizable difference in scale between previous WTO case law with... (More)
The purpose of this thesis is to examine the permissibility of border trade measures undertaken with a climate change rationale under the current regulatory environment of the WTO. Three interconnected angles regarding such permissibility have been examined. An overview was made of the current WTO regulation with regards to its potential impact on climate motivated border measures. This section found that WTO law in several cases leave potential room for approval for border measures undertaken with an environmental purpose such as climate change. However, it was also found that considerable uncertainty still remained regarding hard application of many of these rules. The very sizable difference in scale between previous WTO case law with environmental aspects when compared to the potentially enormous trade impact of permissible climate border measures also made caution necessary when drawing conclusions from them. Article XX of the GATT stating the general exceptions in that agreement was examined in some detail due to its potentially great importance in establishing the permissibility of any border measure undertaken with a climate change purpose. Though contingent on several crucial factors such as integrity of purpose, implementational details, the exact nature of potential discriminatory effect and WTO jurisprudence, it was found that Article XX recourse for climate motivated border measures can not be discounted ex ante.
Building on the knowledge gained in the first chapter, the second chapter seeks to examine the permissibility of some of the most popularly discussed border climate measures when confronted with WTO law. They were overall found to be problematic to square with WTO regulation in any clear sense. Border tax adjustments is arguably found to be the front-runner for permissibility although it may encounter serious problems due to the nefariously complex process of trying to measure ‘upstream’ carbon which may become necessary to implement a fair adjustment.
The last chapter, building on the previous two, is a response to the likelihood that the ultimate permissibility of climate border measures will come to rely on future policy developments. Thus, a number of the most likely WTO policy options with regards to determining permissibility are briefly examined with preference for a multilaterally crafted agreement. (Less)
Abstract (Swedish)
Syftet med denna uppsats är att undersöka lovligheten för handelsåtgärder vid gränsen, utförda som ett led i bekämpandet av klimatförändringar, mot bakgrund av rådande WTO-rätt.
Tre sammanknutna infallsvinklar har undersökts i syfte att undersöka denna lovlighet. Inledningsvis har en översikt över rådande WTO-rätt genomförts för att utröna dess potentialla inverkan på klimatmotiverade handelsåtgärder vid gränsen. Kapitlet fann att WTO-rätten lämnade visst utrymme för åtgärder av detta slag. Dock befanns också en stor del osäkerhet alltjämt föreligga vad gäller faktisk applicering av reglerna i detta sammanhang. De WTO fall som anförs på området med miljömässigt relevanta aspekter har alla det gemensamt att de berör jämförelsevis mindre... (More)
Syftet med denna uppsats är att undersöka lovligheten för handelsåtgärder vid gränsen, utförda som ett led i bekämpandet av klimatförändringar, mot bakgrund av rådande WTO-rätt.
Tre sammanknutna infallsvinklar har undersökts i syfte att undersöka denna lovlighet. Inledningsvis har en översikt över rådande WTO-rätt genomförts för att utröna dess potentialla inverkan på klimatmotiverade handelsåtgärder vid gränsen. Kapitlet fann att WTO-rätten lämnade visst utrymme för åtgärder av detta slag. Dock befanns också en stor del osäkerhet alltjämt föreligga vad gäller faktisk applicering av reglerna i detta sammanhang. De WTO fall som anförs på området med miljömässigt relevanta aspekter har alla det gemensamt att de berör jämförelsevis mindre finansiella intressen och har betydligt mindre potential för inverkan på den skala som handelsrestriktioner mot bakgrund av klimatförändringsåtgärder kan medföra. Artikel XX i GATT som reglerar de allmänna undantagen från överenskommelsen ägnades en del detaljerad undersökning till följd av dess potentiellt mycket viktiga roll vid utrönandet av lovligheten inom detta område. Även om legitimiteten för en åtgärd vad gäller denna artikel till sist är beroende av viktiga faktorer som integritet i syfte, implementeringsspecifikationer, diskriminerande effekt och övrig jurisprudens inom WTO befanns det inte vara fallet att Artikel XX kan uteslutas som en möjlig väg till lovlighet för klimatmotiverade handelsåtgärder.
Mot bakgrund av kunskapen införskaffad i det första kapitlet undersökte nästföljande kapitel lovligheten i några av de oftast anförda alternativen vad gäller dessa handelsåtgärder vid gränsen. Överlag befanns det problematiskt att få åtgärderna att stämma överens med WTO-rätt i någon enklare bemärkelse. Gränsskattejusteringar (eng. Border Tax Adjustments) kan lyftas fram som ett något mer trovärdigt alternativ än övriga även om även denna riskerar betydande svårigheter vid en eventuell dispyt till följd av den potentiella nödvändigheten i att bedöma utländska produkters utsläppsegenskaper.
Det sista kapitlet, som i sin tur bygger på de föregående två, är ett resultat av den trolighet som ligger i att den slutliga lovligheten för klimatmotiverade handelsåtgärder vid gränsen till stor del kommer att vila i händerna på framtida policy-utvecklingar. Som ett led i detta undersöks ett flertal troliga policy-alternativ vad gäller fastställande av lovligheten där ett multilateralt skapat miljöavtal framstår som den mest eftersträvansvärda handlingsåtgärden. (Less)
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author
Westberg, Johan LU
supervisor
organization
course
JURM01 20101
year
type
H3 - Professional qualifications (4 Years - )
subject
keywords
Miljörätt, Utrikeshandelsrätt
language
English
id
1628192
date added to LUP
2010-07-14 15:18:59
date last changed
2010-07-14 15:18:59
@misc{1628192,
  abstract     = {The purpose of this thesis is to examine the permissibility of border trade measures undertaken with a climate change rationale under the current regulatory environment of the WTO. Three interconnected angles regarding such permissibility have been examined. An overview was made of the current WTO regulation with regards to its potential impact on climate motivated border measures. This section found that WTO law in several cases leave potential room for approval for border measures undertaken with an environmental purpose such as climate change. However, it was also found that considerable uncertainty still remained regarding hard application of many of these rules. The very sizable difference in scale between previous WTO case law with environmental aspects when compared to the potentially enormous trade impact of permissible climate border measures also made caution necessary when drawing conclusions from them. Article XX of the GATT stating the general exceptions in that agreement was examined in some detail due to its potentially great importance in establishing the permissibility of any border measure undertaken with a climate change purpose. Though contingent on several crucial factors such as integrity of purpose, implementational details, the exact nature of potential discriminatory effect and WTO jurisprudence, it was found that Article XX recourse for climate motivated border measures can not be discounted ex ante. 
Building on the knowledge gained in the first chapter, the second chapter seeks to examine the permissibility of some of the most popularly discussed border climate measures when confronted with WTO law. They were overall found to be problematic to square with WTO regulation in any clear sense. Border tax adjustments is arguably found to be the front-runner for permissibility although it may encounter serious problems due to the nefariously complex process of trying to measure ‘upstream’ carbon which may become necessary to implement a fair adjustment.
The last chapter, building on the previous two, is a response to the likelihood that the ultimate permissibility of climate border measures will come to rely on future policy developments. Thus, a number of the most likely WTO policy options with regards to determining permissibility are briefly examined with preference for a multilaterally crafted agreement.},
  author       = {Westberg, Johan},
  keyword      = {Miljörätt,Utrikeshandelsrätt},
  language     = {eng},
  note         = {Student Paper},
  title        = {The WTO permissibility of border trade measures in climate change mitigation},
  year         = {2010},
}