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Domestic Climate Policies and the WTO

Author

Listed:
  • ZhongXiang Zhang
  • Lucas Assunção

Abstract

The Kyoto Protocol gives Annex 1 countries considerable flexibility in the choice of domestic policies to meet their emissions commitments. Possible climate policies include carbon/energy taxes, subsidies, energy efficiency standards, eco‐labels, and government procurement policies. In order to meet their targets with minimum adverse effects on their economies, Annex 1 governments with differentiated legal and political systems are highly likely to pursue these policies that may have the potential to bring them into conflict with their WTO obligations. This paper explores the potential interaction between these domestic climate policies and WTO rules. It argues that their potential conflicts can be avoided or at least minimised if WTO rules are carefully scrutinised, and efforts are made early on to ensure that the proposed climate policies comply with them. It suggests an early process of pursuing consultations between WTO members and the Parties to the Climate Change Convention and points to the need of further exploring ways to enhance synergies between the trade and climate regimes.

Suggested Citation

  • ZhongXiang Zhang & Lucas Assunção, 2004. "Domestic Climate Policies and the WTO," The World Economy, Wiley Blackwell, vol. 27(3), pages 359-386, March.
  • Handle: RePEc:bla:worlde:v:27:y:2004:i:3:p:359-386
    DOI: 10.1111/j.1467-9701.2004.00603.x
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    References listed on IDEAS

    as
    1. ZhongXiang Zhang, 2000. "Estimating the size of the potential market for the Kyoto flexibility mechanisms," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 136(3), pages 491-521, September.
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    6. ZhongXiang Zhang, 1998. "The Economics of Energy Policy in China," Books, Edward Elgar Publishing, number 1291.
    7. Baranzini, Andrea & Goldemberg, Jose & Speck, Stefan, 2000. "A future for carbon taxes," Ecological Economics, Elsevier, vol. 32(3), pages 395-412, March.
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    12. Daniel Esty, 1994. "Greening the GATT: Trade, Environment, and the Future," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 40, October.
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    14. Barker, Terry & Baylis, Susan & Madsen, Peter, 1993. "A UK carbon/energy tax : The macroeconomics effects," Energy Policy, Elsevier, vol. 21(3), pages 296-308, March.
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    More about this item

    JEL classification:

    • K32 - Law and Economics - - Other Substantive Areas of Law - - - Energy, Environmental, Health, and Safety Law
    • F18 - International Economics - - Trade - - - Trade and Environment
    • K33 - Law and Economics - - Other Substantive Areas of Law - - - International Law
    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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