Reconciling Trade and Climate

Reconciling Trade and Climate

How the WTO Can Help Address Climate Change

Elgar International Economic Law series

Tracey Epps and Andrew Green

This timely book addresses the interaction between policies addressing climate change and the rules of the WTO. The authors expertly examine the law and economics behind the application of trade rules in the area of climate, including the implications of WTO rules for domestic climate measures, the unilateral use of trade measures to attempt to force other countries to take climate action, and the role of trade measures in multilateral climate agreements. The book argues that while there is a possibility of conflict between international trade rules and progress on climate change, it need not be the case. Thus the major focus is on the ways in which trade measures can aid in addressing climate change.

Chapter 9: The Role of Environmental Exceptions

Tracey Epps and Andrew Green

Subjects: environment, climate change, law - academic, international economic law, trade law


ENVIRONMENTAL EXCEPTIONS IN THE WTO The previous chapters have discussed a number of agreements and associated rules setting limits on the permissible form of domestic measures that impact trade. However, the WTO agreements also contain exceptions setting out circumstances in which measures that do not comply with these limits may be saved. These exceptions provide some space for countries to take action affecting trade in certain circumstances where the goal is to protect the environment. The difficulty, of course, is in determining whether a measure is actually aimed at protecting the environment (such as by reducing GHG emissions) or is really focused on protecting domestic industry. For example, suppose a country puts in place a regulatory measure imposing fuel efficiency requirements on new cars, which a panel finds violates a substantive provision of the GATT, such as the national treatment requirement discussed in Chapter 5. The country may argue that the provision is nonetheless saved under GATT Article XX, which lists various measures that a country can take even though they violate other rules in the Agreement. As we discuss, environmental protection measures are among those that may be saved. However, the measure may (i) not have any environmental protective effect but instead only provide an advantage to domestic industry; (ii) have a lesser environmental effect than would otherwise be the case because it is in part protecting domestic industry; or (iii) have the same effect on the environment as it would if it were not protecting domestic industry but...

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