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Multilateral Trade Measures in a Post-2012 Climate Change Regime?: What Can Be Taken from the Montreal Protocol and the WTO?

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  • Zhang, ZhongXiang

Abstract

The climate-trade nexus gains increasing attention as governments are taking great efforts to forge a post-2012 climate change regime to succeed the Kyoto Protocol. This raises the issues of the scope of trade-related measures and of when and how they could be used. To gain some guidance on the scope of trade provisions in a post-2012 climate regime, this paper first discusses the Montreal Protocol in which such trade provisions have been included. The paper argues that while it is unlikely for developing country parties to agree the inclusion of trade-related measures in a post-2012 climate regime, trade-related measures should, at the very least, be contemplated for a set of industrialized countries (Annex I or II countries) as part of the evolving climate regime. It should be specified how these measures will apply to non-complying parties within this group and when and how unilateral trade measures can be used against countries outside the group. To that end, the paper emphasizes that there is a clear need to define comparable efforts towards climate mitigation and adaptation to discipline the use of unilateral trade measures at the international level, as the Lieberman-Warner bill in the U.S. Senate demonstrated great possibility that some industrialized countries, if not all, are considering the term “comparable” as the standard by which to assess the efforts made by their trading partners in order to decide on whether to impose unilateral trade measures on them. While that bill died on the floor of the Senate, this is by no means the end of the prospect for border adjustment type of unilateral trade measures bill. The paper argues that the Lieberman-Warner type of border adjustment bill, in its current form, is likely to face WTO-consistency and methodological challenges. It also holds out more sticks than carrots to developing countries. In order to encourage developing countries to do more to combat climate change, the paper suggests that developed countries should clearly focus on carrots. Sticks can be incorporated, but only if they are credible and realistic and serve as a useful supplement to push developing countries to take actions or adopt policies and measures earlier than would otherwise have been the case.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 12782.

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Date of creation: 05 Sep 2008
Date of revision: 29 Dec 2008
Handle: RePEc:pra:mprapa:12782

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Keywords: Post-Kyoto climate negotiations; Trade-related measures; Developing countries;

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References

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  1. Zhang, ZhongXiang, 2008. "How far can developing country commitments go in an immediate post-2012 climate regime?," MPRA Paper 12441, University Library of Munich, Germany, revised 10 Dec 2008.
  2. Roland Ismer & Karsten Neuhoff, 2007. "Border tax adjustment: a feasible way to support stringent emission trading," European Journal of Law and Economics, Springer, Springer, vol. 24(2), pages 137-164, October.
  3. ZhongXiang Zhang, 2009. "Is It Fair to Treat China as a Christmas Tree to Hang Everybody’s Complaints? Putting its Own Energy Saving into Perspective," Working Papers, Fondazione Eni Enrico Mattei 2009.45, Fondazione Eni Enrico Mattei.
  4. Zhang, ZhongXiang, 2008. "Asian Energy and Environmental Policy: Promoting Growth While Preserving the Environment," MPRA Paper 12224, University Library of Munich, Germany.
  5. ZhongXiang Zhang, 2003. "Open Trade with the U.S. without Compromising Canada’s Ability to Comply with its Kyoto Target," Working Papers, Fondazione Eni Enrico Mattei 2003.68, Fondazione Eni Enrico Mattei.
  6. Zhang, ZhongXiang, 2003. "Why Has China not Embraced a Global Cap-and-Trade Regime?," MPRA Paper 12783, University Library of Munich, Germany, revised Jul 2007.
  7. Zhang, Zhong Xiang, 1999. "Should the rules of allocating emissions permits be harmonised?," Ecological Economics, Elsevier, Elsevier, vol. 31(1), pages 11-18, October.
  8. Emma Paulsson, 2009. "A review of the CDM literature: from fine-tuning to critical scrutiny?," International Environmental Agreements: Politics, Law and Economics, Springer, Springer, vol. 9(1), pages 63-80, February.
  9. Zhang, ZhongXiang, 2000. "Can China afford to commit itself an emissions cap? An economic and political analysis," Energy Economics, Elsevier, Elsevier, vol. 22(6), pages 587-614, December.
  10. Gary Clyde Hufbauer & Steve Charnovitz & Jisun Kim, 2009. "Global Warming and the World Trading System," Peterson Institute Press: All Books, Peterson Institute for International Economics, Peterson Institute for International Economics, number 4280, July.
  11. Zhang, ZhongXiang & Assunção, Lucas, 2002. "Domestic climate policies and the WTO," MPRA Paper 13223, University Library of Munich, Germany.
  12. Bhagwati, Jagdish & Mavroidis, Petros C., 2007. "Is action against US exports for failure to sign Kyoto Protocol WTO-legal?," World Trade Review, Cambridge University Press, Cambridge University Press, vol. 6(02), pages 299-310, July.
  13. Parry, Ian W. H. & Williams, Roberton III & Goulder, Lawrence H., 1999. "When Can Carbon Abatement Policies Increase Welfare? The Fundamental Role of Distorted Factor Markets," Journal of Environmental Economics and Management, Elsevier, vol. 37(1), pages 52-84, January.
  14. James Poterba & Julio Rotemberg, 1995. "Environmental taxes on intermediate and final goods when both can be imported," International Tax and Public Finance, Springer, Springer, vol. 2(2), pages 221-228, August.
  15. Zhang, ZhongXiang, 1998. "Greenhouse gas emissions trading and the world trading system," MPRA Paper 12971, University Library of Munich, Germany.
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