Border carbon adjustments – the studies never end

Lawyers love to poke about in the GATT and other WTO agreements to try and figure out how border carbon adjustments would square with current trade rules. I have seen umpteen studies made on this, and I myself am guilty of having written my master thesis about it. I know of one Ph.D candidate at the World Trade Institute who is writing their dissertation on it and in the latest issue of the journal I was published in there was another study on it. Further, at least two environmental think tanks that i’ve randomly come across are currently doing work on it.

I understand the fascination. Looking at this area tends to fill you with the feeling that there are “hard” answers to be found here. Of course, as has been established over and over again, permissibility of border carbon measures will come to depend on the specifics of the measure. The very incomplete agreement of the WTO does give room for border carbon measures, but ultimately political progress is what to hope for, not lenient trade judges.

It’s actually somewhat distressing that many seem so cavalier about the fact that trade judges would sit and decide on the appropriateness of environmental measures in the WTO. Yes, technically they would decide “only” on the trade implications, but as is perfectly clear to anyone who has looked at this area, separating one from the other without including political concerns might be difficult indeed. I have explored this theme before, and to recap quickly: It’s none too great of an idea to have the Appellate Body decide the environmental trajectory of the WTO. The fervour of the Tuna/Dolphin case may have died down a bit when the Appellate Body gave a reasonable ruling in Shrimp/Turtle, but these issues ultimately belong on the negotiating table.

But of course, the studies are likely to keep coming in. It is an important area after all though pretty much everything has been said at this point barring further progress. In my personal opinion, little new has actually been said after 2009, when Steve Charnovitz, Gary Hufbauer and Jisun Kim released “Global Warming and the World Trading System“, which is still the best book i’ve read on this topic.

My own opinions and technical exposé from 2010 when I went deep into this can be found here: Westberg – The WTO permissibility of border trade measures in climate change mitigation

And Happy New Year!

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