Research Handbook on Climate Change and Trade Law
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Research Handbook on Climate Change and Trade Law

Edited by Panagiotis Delimatsis

The interaction between climate change and trade has grown in prominence in recent years. This Research Handbook contains authoritative original contributions from leading experts working at the interface between trade and climate change. It maps the state of affairs in such diverse areas as: carbon credits and taxes, sustainable standard-setting and trade in ‘green’ goods and services or investment, from both a regional and global perspective. Panagiotis Delimatsis redefines the interrelationship of trade and climate change for future scholarship in this area.
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Chapter 14: Trade measures to address climate change: territory and extraterritoriality

Margaret A. Young


Climate change is a worldwide problem. In response, countries may decide to impose trade measures that modify production or consumption behaviour within or outside their territory: examples include energy subsidies, border tax adjustments (BTAs), certification and labelling requirements, and import bans. Yet while trade law imposes requirements that measures be non-discriminatory or least trade-restrictive, there is some uncertainty as to whether the measures must also respect the principles of public international law relating to the exercise of prescriptive jurisdiction. Must there be a ‘territorial nexus’ between the objective of the trade measure and the state imposing the measure? This chapter shows that the Appellate Body has repeatedly reserved its opinion on such questions, in contrast to other tribunals. It then takes a position on this issue, arguing that trade measures addressing climate change are unlikely to enliven—let alone violate—public international law rules on extraterritorial jurisdiction. In the alternative, it argues that if a nexus is required, it is relatively easy to satisfy. Neither of these findings, however, remove the need to consider the lack of parity between and within states with respect to historic contributions to the cause of climate change and vulnerabilities to its impacts.

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