Environmental vs. Traditional Border Tax Adjustments: Combating Global Environmental Challenges Through Tax Law

11 Pages Posted: 9 Feb 2015 Last revised: 10 Feb 2015

See all articles by Alice Pirlot

Alice Pirlot

University of Oxford - Said Business School; Catholic University of Louvain (UCL)


During the 1970s, members of the GATT (General Agreement on Tariffs and Trade) intensively debated the topic of border tax adjustments (BTAs). The debate focused on the definition of BTAs, the practices of countries in relation to BTAs (such as value added taxes, excise taxes, cascade taxes) and the potential effects of BTAs on international trade, including their impact on developing countries. Though the parties involved could not agree on all aspects being debated, they all recognised the confusing character of the concept of BTA.

Forty years later, the debate is still ongoing. It has, however, taken on a new dimension with the introduction of the concept of “environmental BTAs”. Interest in these new measures can be explained by the important environmental challenges facing today’s world. In light of the limited international commitment to dealing with these challenges, environmental BTAs may appear as useful in complementing domestic environmental policies. This new dimension to BTAs has not eased the debate. After forty years of heated discussion on the concept of BTAs, a new question – probably even more complex – has arisen: “how to define environmental BTAs?”

The purpose of this paper is to determine the specificities of the concept of environmental BTAs by way of comparison to the “traditional” concept of BTAs. Hence, this paper does not, contrary to what is often done in literature on the subject, focus on the question of the compatibility of environmental BTAs with the rules of the GATT/WTO. The objective is rather to highlight the distinguishing features of environmental BTAs.

First, this paper recalls the scope of the debate on environmental BTAs and presents its main controversies. Second, it reviews the different concepts that have been used to describe the legal phenomenon of environmental BTAs. Finally, the third part identifies the specificities of the measures that are usually referred to as “environmental BTAs”, pointing out the differences between these measures and the traditional concept of BTAs.

Suggested Citation

Pirlot, Alice, Environmental vs. Traditional Border Tax Adjustments: Combating Global Environmental Challenges Through Tax Law. WU International Taxation Research Paper Series No. 2015-05, Available at SSRN: https://ssrn.com/abstract=2560890 or http://dx.doi.org/10.2139/ssrn.2560890

Alice Pirlot (Contact Author)

University of Oxford - Said Business School ( email )

Park End Street
Oxford, OX1 1HP
Great Britain

Catholic University of Louvain (UCL) ( email )

Place Montesquieu, 3
Louvain-la-Neuve, 1348

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