Citations (3)



The Interface Between the Trade and Climate Change Regimes: Scoping the Issues

Patrick Low

World Trade Organization (WTO)

Gabrielle Marceau

World Trade Organization (WTO)

Julia Reinaud

affiliation not provided to SSRN

January 12, 2011

World Trade Organization Staff Working Paper ERSD-2011-1

As governments increasingly adopt policies to reduce greenhouse gas emissions, concern has grown on two fronts. First, carbon leakage can occur when mitigation policies are not the same across countries and producers seek to locate in jurisdictions where production costs are least affected by emission constraints. The risk of carbon leakage raises questions about the efficacy of climate change policies in a global sense. Secondly, it is precisely the cost-related consequences of differential mitigation policies that feed industry concerns about competitiveness. We thus have a link between environmental and competitiveness perspectives that fuses climate change and trade regimes in potentially problematic ways as governments contemplate trade actions to manage the environmental and/or competitiveness consequences of differential climate change policies. On the trade side of this relationship, we have the reality that the GATT/WTO rules were not originally drafted to accommodate climate change policies and concerns. The purpose of this paper is to analyze the relevance of certain WTO rules to the interface between climate change and trade, focusing in particular on border measures, technical regulations on trade, standards and labelling, and subsidies and countervailing duties.

It concludes that in the absence of clear international understandings on how to manage the climate change and trade interface, we run the risk of a clash that compromises the effectiveness of climate change policies as well as the potential gains from specialization through trade.

Number of Pages in PDF File: 45

Keywords: Border adjustments, carbon leakage, climate change, competitiveness, GATT/WTO, standards, trade

JEL Classification: F13, F18, K33, Q54

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Date posted: January 23, 2011  

Suggested Citation

Low, Patrick and Marceau, Gabrielle and Reinaud, Julia, The Interface Between the Trade and Climate Change Regimes: Scoping the Issues (January 12, 2011). World Trade Organization Staff Working Paper ERSD-2011-1. Available at SSRN: https://ssrn.com/abstract=1742803 or http://dx.doi.org/10.2139/ssrn.1742803

Contact Information

Patrick Low
World Trade Organization (WTO) ( email )
154 Rue de Lausanne
CH-1211 Geneva 21
Gabrielle Marceau (Contact Author)
World Trade Organization (WTO) ( email )
Rue de Lausanne 154
Geneva 21, CH-1211
Julia Reinaud
affiliation not provided to SSRN ( email )
Feedback to SSRN

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