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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.

Suggested Citation

  • Zhang, ZhongXiang, 2008. "Multilateral Trade Measures in a Post-2012 Climate Change Regime?: What Can Be Taken from the Montreal Protocol and the WTO?," MPRA Paper 12782, University Library of Munich, Germany, revised 29 Dec 2008.
  • Handle: RePEc:pra:mprapa:12782
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    References listed on IDEAS

    as
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    10. Zhang, ZhongXiang, 2008. "Asian energy and environmental policy: Promoting growth while preserving the environment," Energy Policy, Elsevier, vol. 36(10), pages 3905-3924, October.
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    Cited by:

    1. Zhang, Zhong Xiang, 2012. "Competitiveness and Leakage Concerns and Border Carbon Adjustments," International Review of Environmental and Resource Economics, now publishers, vol. 6(3), pages 225-287, December.
    2. Zhang, ZhongXiang, 2014. "Programs, Prices and Policies Towards Energy Conservation and Environmental Quality in China," Working Papers 249427, Australian National University, Centre for Climate Economics & Policy.
    3. ZhongXiang Zhang, 2013. "Trade in environmental goods, with focus on climate-friendly goods and technologies," Chapters, in: Geert Van Calster & Denise Prévost (ed.), Research Handbook on Environment, Health and the WTO, chapter 19, pages 673-699, Edward Elgar Publishing.
    4. ZhongXiang Zhang, 2012. "Effective environmental protection in the context of government decentralization," International Economics and Economic Policy, Springer, vol. 9(1), pages 53-82, March.
    5. ZhongXiang Zhang, 2012. "Climate Change Meets Trade in Promoting Green Growth: Potential Conflicts and Synergies," Chapters, in: Chin Hee Hahn & Sang-Hyop Lee & Kyoung-Soo Yoon (ed.), Responding to Climate Change, chapter 6, Edward Elgar Publishing.
    6. ZhongXiang Zhang, 2012. "Who should bear the cost of China’s carbon emissions embodied in goods for exports?," Mineral Economics, Springer;Raw Materials Group (RMG);Luleå University of Technology, vol. 24(2), pages 103-117, June.
    7. Zhang, ZhongXiang, 2010. "China in the transition to a low-carbon economy," Energy Policy, Elsevier, vol. 38(11), pages 6638-6653, November.
    8. Zhang, ZhongXiang, 2009. "Liberalizing climate-friendly goods and technologies in WTO environmental goods negotiations: product coverage, modalities, challenges and the way forward," MPRA Paper 16943, University Library of Munich, Germany, revised 10 Aug 2009.
    9. Ling Tang & Qin Bao & ZhongXiang Zhang & Shouyang Wang, 2015. "Carbon-based border tax adjustments and China’s international trade: analysis based on a dynamic computable general equilibrium model," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 17(2), pages 329-360, April.
    10. ZhongXiang Zhang, 2010. "The U.S. proposed carbon tariffs, WTO scrutiny and China’s responses," International Economics and Economic Policy, Springer, vol. 7(2), pages 203-225, August.
    11. Junko Mochizuki & ZhongXiang Zhang, 2011. "Environmental Security and its Implications for China’s Foreign Relations," Working Papers 2011.30, Fondazione Eni Enrico Mattei.
    12. Zhang, ZhongXiang, 2018. "Trade and Climate Change: Focus on Carbon Leakage, Border Carbon Adjustments and WTO Consistency," Foundations and Trends(R) in Microeconomics, now publishers, vol. 12(1), pages 1-108, August.
    13. Zhongxiang Zhang, 2011. "In what format and under what timeframe would China take on climate commitments? A roadmap to 2050," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 11(3), pages 245-259, September.
    14. Lucas Bretschger & Alexandra Vinogradova, 2015. "Equitable and effective climate policy: Integrating less developed countries into a global climate agreement," International Economics and Economic Policy, Springer, vol. 12(4), pages 437-467, October.
    15. Jung‐Ah Hwang & Yeonbae Kim, 2017. "Effects of Environmental Regulations on Trade Flow in Manufacturing Sectors: Comparison of Static and Dynamic Effects of Environmental Regulations," Business Strategy and the Environment, Wiley Blackwell, vol. 26(5), pages 688-706, July.
    16. Chen, G.Q. & Zhang, Bo, 2010. "Greenhouse gas emissions in China 2007: Inventory and input-output analysis," Energy Policy, Elsevier, vol. 38(10), pages 6180-6193, October.
    17. Zhang, ZhongXiang, 2011. "Breaking the Impasse in International Climate Negotiations: A New Direction for Currently Flawed Negotiations and a Roadmap for China to 2050," Climate Change and Sustainable Development 108263, Fondazione Eni Enrico Mattei (FEEM).
    18. Bao, Qin & Tang, Ling & Zhang, ZhongXiang & Wang, Shouyang, 2013. "Impacts of border carbon adjustments on China's sectoral emissions: Simulations with a dynamic computable general equilibrium model," China Economic Review, Elsevier, vol. 24(C), pages 77-94.
    19. Stine Aakre, 2016. "The political feasibility of potent enforcement in a post-Kyoto climate agreement," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 16(1), pages 145-159, February.
    20. Stine Aakre, 2016. "The political feasibility of potent enforcement in a post-Kyoto climate agreement," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 16(1), pages 145-159, February.
    21. Jan T. Mizgajski, 2013. "CO2 Embodied in Trade between Poland and Selected Countries," Journal of Economic Development, Environment and People, Alliance of Central-Eastern European Universities, vol. 2(4), pages 48-60, September.
    22. Zhang, ZhongXiang, 2010. "The US proposed carbon tariffs and China's responses," Energy Policy, Elsevier, vol. 38(5), pages 2168-2170, May.
    23. Bao, Qin & Tang, Ling & Zhang, ZhingXiang & Qiao, Han & Wang, Shouyang, 2012. "Impact of Border Carbon Adjustments on China’s Sectoral Emissions: Simulations with a Dynamic Computable General Equilibirum Model," Working Papers 249391, Australian National University, Centre for Climate Economics & Policy.
    24. Niven Winchester, 2018. "Can tariffs be used to enforce Paris climate commitments?," The World Economy, Wiley Blackwell, vol. 41(10), pages 2650-2668, October.
    25. Alexandra E. Cirone & Johannes Urpelainen, 2013. "Trade sanctions in international environmental policy: Deterring or encouraging free riding?," Conflict Management and Peace Science, Peace Science Society (International), vol. 30(4), pages 309-334, September.

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    More about this item

    Keywords

    Post-Kyoto climate negotiations; Trade-related measures; Developing countries;
    All these keywords.

    JEL classification:

    • F18 - International Economics - - Trade - - - Trade and Environment
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • 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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