Reconciling Trade and Climate
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Reconciling Trade and Climate

How the WTO Can Help Address Climate Change

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.
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Chapter 11: Carrots – Positive Inducements

Tracey Epps and Andrew Green


One suggestion for overcoming the problem of persuading countries to participate in and/or comply with an international climate change agreement is through the use of positive incentives, often known as ‘carrots’.1 Positive incentives may be contrasted with ‘sticks’ (discussed in Chapter 13), where threats of actions such as trade sanctions or withdrawal of aid are employed if target countries do not follow a particular course. Possible means of providing positive incentives or carrots include technical assistance and capacity building, technology transfers, increased investment, foreign aid, and debt forgiveness. There is also at least some scope for developed countries to use trade measures as carrots by offering preferential market access or other trade concessions to developing countries to persuade them to take action to mitigate climate change. This chapter focuses on the unilateral use of trade measures as carrots. Unilateral trade measures used as carrots raise questions not only as to their potential environmental benefits but also as to their legality under WTO rules. In this chapter, we briefly canvass the legal issues that will arise as a result of these measures and note the uncertainties and difficulties they present.2 We then ask, even if they may be used in a WTO-consistent manner, is it desirable to use unilateral trade measures as carrots? We conclude that trade measures used as carrots are, by themselves, unlikely to provide sufficient motivation to developing countries to take the climate change action desired of them and thus are not likely to achieve the goal of...

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