Abstract
The argument goes that the causes of environmental problems in a market economy are economics and that the consequences of environmental problems have important economic dimensions that travel from producers to consumers of good and services. Hence, the importance of solutions that are environmentally effective, economically sensible, and politically pragmatic. In the specific case of trade, traditionally, the thinking has been that more trade meant more energy consumption and therefore higher levels of greenhouse gas (GHG) emissions. Economic growth has come at a cost to the environment. But it does not have to be that way. Trade can be part of the solution to reducing GHG emissions by providing preferential treatment to green goods/services in trade agreements, leading consumers to buy green goods such as electric cars.
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Notes
- 1.
See generally World Economic Forum, “The Global Risks Report,” 12th edition, Cologny/Geneva: Switzerland, 2017, available at http://www3.weforum.org/docs/GRR17_Report_web.pdf. Regarding arguments on the correlation between trade liberalization, on the one hand, and climate change and inequity, on the other, neither of these problems seems to be driven by economics or the trading system. For instance, trade makes every country richer. But it is not for the WTO to decide who individually (as citizens) gets how much from the benefits of trade. That is for national governments to decide based on national taxation. For a broader analysis of wealth and inequality, see Hughes (2018) and Milanovic (2018). For an inspirational statement on the core principles of development policymaking, see the Stockholm Statement of 2016, available at https://www.wider.unu.edu/sites/default/files/News/Documents/Stockholm%20Statement.pdf.
- 2.
Is Trade Good or Bad for the Environment? OECD, http://www.oecd.org/trade/tradeandenvironment.htm [https://perma.cc/4VXK-KTWC]; see also Environmental Goods and Services Sector, Europa: Eurostat, http://ec.europa.eu/eurostat/web/environment/environmental-goods-and-services-sector (“The purpose of environmental goods and services is to prevent, reduce and eliminate pollution and any other form of environmental degradation … and to conserve and maintain the stock of natural resources, hence safeguarding against depletion.”) [https://perma.cc/5R27-B7FH].
- 3.
Some policy suggestions include a tax on the carbon content of imports and refund the tax to companies when they export, as the European Union is doing with cement. See The Economist, “Externalities: The lives of others,” pp. 60–61, at 61. Others have studied the effects of a tax policy on greenhouse gas (GHG) emissions. See Nordhaus et al. (2013).
- 4.
Andrew et al. (2013), p. 23.
- 5.
Lilliston (2016).
- 6.
Is Trade Good or Bad for the Environment? OECD, http://www.oecd.org/trade/tradeandenvironment.htm [https://perma.cc/4VXK-KTWC]; see also Environmental Goods and Services Sector, Europa: Eurostat, http://ec.europa.eu/eurostat/web/environment/environmental-goods-and-services-sector (“The purpose of environmental goods and services is to prevent, reduce and eliminate pollution and any other form of environmental degradation … and to conserve and maintain the stock of natural resources, hence safeguarding against depletion.”) [https://perma.cc/5R27-B7FH].
- 7.
Lilliston (2016).
- 8.
“Trade rules trump climate action: U.S. blocks India’s ambitious solar plans,” EcoWatch, 26 February 2016, available at https://www.ecowatch.com/trade-rules-trump-climate-action-u-s-blocks-indias-ambitious-solar-pla-1882181449.html.
- 9.
The notion of measuring the carbon footprint as part of a sustainable world is even vivid in the ‘Clean Label’ movement, which aims to provide honest information to the consumer and food professionals on questions such as what there is in our food, who made it, what is the carbon footprint and related issues. See https://gocleanlabel.com/about/.
- 10.
See generally Robert A. Hefner III, The Grand Energy Transition: The Rise of Energy Gases, Sustainable Life and Growth, and the Next Great Economic Expansion (2015) (detailing the global economic transition to sustainable energy).
- 11.
As a result, interesting questions would need to be answered, such as could the trade regime be modified to reduce fossil fuel consumption? Should it be? See in this respect the work of Trachtman, Joel, “WTO Law Constraints on Border Tax Adjustment and Tax Credit Mechanisms to Reduce the Competitive Effects of Carbon Taxes,” Resources for the Future (January 2016); see also Workshop Report: Reforming Fossil Fuel Subsidies through the WTO and International Trade Agreements Monday, 22 May 2017, WTO, Geneva, Switzerland, available at http://climatestrategies.org/wp-content/uploads/2017/04/WTO-Workshop-Report-May-2017.pdf; Cosbey, Aaron et al., “A Guide for the Concerned: Guidance on the elaboration and implementation of border carbon adjustment,” Entwined (November 2012).
- 12.
See Amie Gaye, Access to Energy and Human Development, United Nations Development Programme, Human Development Report 2007/2008, http://hdr.undp.org/sites/default/files/gaye_amie.pdf [https://perma.cc/3JL8-EUT5]; see also Trade Beyond the Tweet, Bertelsmann Found., http://www.bfna.org/publication/bvisual-trade-beyond-the-tweet (analyzing how major economies are supported by trade) [https://perma.cc/JES9-G5ZA].
- 13.
World’s Eight Richest People Have Same Wealth as Poorest 50%, The Guardian (Jan. 15, 2017), https://www.theguardian.com/global-development/2017/jan/16/worlds-eight-richest-people-have-same-wealth-as-poorest-50 [https://perma.cc/PGP8-XS9L].
- 14.
The Scale of Economic Inequality in the UK, Equality Trust, https://www.equalitytrust.org.uk/scale-economic-inequality-uk [https://perma.cc/G8K5-9W8E].
- 15.
Breaking ‘Silo’ Approach Key in Toppling Barriers to Merging Three Pillars of Sustainable Development, Speaker Tells High-level Political Forum, U.N. Meetings Coverage ECOSOC/6705 (June 30, 2015), https://www.un.org/press/en/2015/ecosoc6705.doc.htm [https://perma.cc/4YFM-H6DY].
- 16.
See, e.g., Sustainable Development Knowledge Platform, U.N. Dep’t of Econ. & Soc. Affairs, https://sustainabledevelopment.un.org/?menu=1300 (identifying the sustainable development goals articulated by the United Nations) [https://perma.cc/U9QU-APJQ].
- 17.
Cynthia D. Crain and Dwight R. Lee, International Trade Creates More and Better Jobs, Nat’l Council on Econ. Educ. (2015), http://www.econedlink.org/lessons/docs_lessons/575_international_trade1.pdf [https://perma.cc/4JNP-BXYT]. In the Western world, only thirteen per cent of job losses are the result of trade agreements; the remaining eighty-eight per cent come from technology and innovation. See Paul Wiseman, Why Robots, Not Trade, are Behind so Many Factory Job Losses, AP (Nov. 2, 2016), https://apnews.com/265cd8fb02fb44a69cf0eaa2063e11d9/mexico-taking-us-factory-jobs-blame-robots-instead [https://perma.cc/F48H-ZQS7].
- 18.
Archer (2016) and Wagner and Weitzman (2016). Mark Carney, Governor of the Bank of England, has even warned of the catastrophic impact climate change could potentially have on the international financial system. See R. Partington, “Mark Carney warns of climate change threat to financial system,” The Guardian, 6 April 2018, available at https://www.theguardian.com/business/2018/apr/06/mark-carney-warns-climate-change-threat-financial-system.
- 19.
International Monetary Fund, “World Economic Outlook Update,” January 2019, p. 7.
- 20.
Gary Burtless, Worsening American income: Inequality: Is World Trade to Blame?, Brookings Inst., (Mar. 1, 1996), https://www.brookings.edu/articles/worsening-american-income-inequality-is-world-trade-to-blame/ [https://perma.cc/XB8B-KLGJ].
- 21.
Stockholm Env’t Inst., Peter Erickson et al., International Trade and Global Greenhouse Gas Emissions: Could Shifting the Location of Production Bring GHG Benefits? 2 (Apr. 2013), https://www.sei-international.org/mediamanager/documents/Publications/SEI-ProjectReport-EricksonP-InternationalTradeAndGlobalGreenhouseGasEmissions-2013.pdf [https://perma.cc/RKA7-UBYZ].
- 22.
See Towards the End of Poverty, The Economist (June 1, 2013), http://www.economist.com/news/leaders/21578665-nearly-1-billion-people-have-been-taken-out-extreme-poverty-20-years-world-should-aim [https://perma.cc/WHD7-8TZY].
- 23.
Wise (2006), p. 342.
- 24.
Susan Ariel Aaronson, Human Rights, The World Bank 443, 443 http://siteresources.worldbank.org/INTRANETTRADE/Resources/C21.pdf [https://perma.cc/P5KD-KZX8].
- 25.
- 26.
Esty (1994).
- 27.
See the views of Gregory Mankiw, stating that trade improves average living standards. See G. Mankiw, “Why Economists Are Worried About International Trade,” The New York Times, 16 February 2018, available at https://www.nytimes.com/2018/02/16/business/trump-economists-trade-tariffs.html.
- 28.
See generally the work by the political economist Joseph Schumpeter. But see also Ayres (1996), pp. 117–134 (arguing that “trade was at best a minor contributor to growth in the past and is probably now contributing negatively to both national wealth and equity, hence to welfare”).
- 29.
One can think, for instance, of the argument that, if China and India bring millions of people into the middle class, the world will not be sustainable due to higher levels of consumption (of goods, food, energy) in these two countries. However, Sustainable Development Goal 12 (ensure sustainable consumption and production patterns) is about “promoting resource and energy efficiency, sustainable infrastructure, and providing access to basic services, green and decent jobs and a better quality of life for all.” See UN Sustainable Development Goals, Goal 12, available at http://www.un.org/sustainabledevelopment/sustainable-consumption-production/.
- 30.
See Council Regulation (EC) No 1236/2005 of 27 June 2005, OJ L 200, 30.7.2005, p. 1.
- 31.
Leal-Arcas (2010a), pp. 17–90.
- 32.
John Naisbitt popularized the term ‘megatrends’ with his book Megatrends: Ten new directions transforming our lives, New York: Warner Books, 1982.
- 33.
Daniel Esty of Yale Law School has developed 10 mega-trends of the twenty-first century, one of which is a bottom-up approach to climate action. See Esty (2017), pp. 41–42.
- 34.
Several factors exacerbate climate change. For instance, increasingly, the world is experiencing frequent cases of floods and they are predicted to increase exponentially. One cause is global warming. Warmer seas evaporate faster and warmer air can retain more water vapour, which provokes the violence of storms and the intensity of heavy rains. See The Economist, “How to cope with floods,” p. 11, 2 September 2017. Also, eating meat from animals has negative effects on climate change. See The Economist, “Feed as well as food,” pp. 13–14, at 13, 2 September 2017.
- 35.
D. Victor, “Why Paris worked: A different approach to climate diplomacy,” Yale Environment 360, 15 December 2015.
- 36.
By unilateral action, we mean that the Paris Agreement promotes diversity in that countries are free to do unilaterally what they think is best for their own political economy in the fight against climate change. Countries, therefore, agree to collective targets, but can also implement their own goals.
- 37.
See Environmental Protection Agency, “Climate Change in the United States: Benefits of Global Action,” June 2015. Unlike the UN Framework Convention on Climate Change of 1992, which divides countries into Annex I and non-Annex I and makes only Annex I countries be bound to climate change mitigation, the Paris Agreement on Climate Change of 2015 proposes universal goals for climate change mitigation. At the COP 23 in November 2017, the US was rather passive given its intent to withdraw from the Paris Agreement. Without the US’s leadership, it might be difficult to reach new climate rules and China may use the potential American absence to lead future negotiations.
- 38.
Leal and Leal-Arcas (2018).
- 39.
It is remarkable to see the transformation of climate change agreements in terms of governance structure in such a short period of time: in less than 20 years, the 1997 Kyoto Protocol as an example of a top-down approach to climate change mitigation, and the 2015 Paris Climate Agreement as an example of a bottom-up approach to climate change mitigation. For an analysis of the Paris Climate Agreement, see Bodansky (2016), pp. 288–319; Druzin (2016), pp. 18–23.
- 40.
‘The international trade system – the World Trade Organization (WTO) as well as regional and bilateral trade agreements – has often been criticised from a climate policy perspective, with trade rules perceived by some as a barrier to stronger climate ambition. Yet trade rules can also be looked at as something that could potentially help to achieve transformative change in climate policy.’ See Climate Strategies, “The trade system and climate action: Ways forward under the Paris Agreement,” Working Paper, October 2016, available at http://climatestrategies.org/wp-content/uploads/2016/01/Trade-and-Paris-Agreement-Summary.pdf, p. 2.
- 41.
- 42.
There is extensive literature on how trade in environmental goods can support a sustainable future. See for instance Lester, Simon and Watson, K. William (August 19, 2013) “Free Trade in Environmental Goods: The Trade Remedy Problem,” Cato Institute Free Trade Bulletin No. 54; Zhang (2013), pp. 673–699; Wu (2014), p. 93; Araya (2016).
- 43.
See for instance Peters and Hertwich (2006), pp. 379–387.
- 44.
On the links between climate change and trade, see Leal-Arcas (2013a).
- 45.
Is Trade Good or Bad for the Environment? OECD, http://www.oecd.org/trade/tradeandenvironment.htm [https://perma.cc/4VXK-KTWC]; see also Environmental Goods and Services Sector, Europa: Eurostat, http://ec.europa.eu/eurostat/web/environment/environmental-goods-and-services-sector (“The purpose of environmental goods and services is to prevent, reduce and eliminate pollution and any other form of environmental degradation … and to conserve and maintain the stock of natural resources, hence safeguarding against depletion.”) [https://perma.cc/5R27-B7FH].
- 46.
Deep decarbonization pathways project (2015) Pathways to deep decarbonization 2015 report – executive summary, SDSN. For a comprehensive analysis on the topic, see Bacchus (2018a).
- 47.
Ottinger (2013).
- 48.
Tagliapietra (2012).
- 49.
See a joint statement on Trilateral Meeting of the Trade Ministers of the United States, Japan and the European Union, 31 May 2018, regarding what new WTO rules might look like when it comes to addressing non-market-oriented policies, in the fight against unfair competition. Available at http://trade.ec.europa.eu/doclib/docs/2018/may/tradoc_156906.pdf.
- 50.
In the case of shipping, the International Maritime Organization (IMO) has decided to reduce the amount of sulphur permitted in bunker fuel from 3.5% to 0.5% by 2020 because it releases a lot of CO2, thereby trying to fight climate change. An alternative option to bunker fuel is liquefied natural gas, whose burning releases 25% less CO2 than burning bunker fuel. See The Economist, “Marine technology of the future: In need of a clean up,” 3 November 2018, pp. 75–77, at 75 and 77. According to Mikhail Sofiev and his colleagues, the IMO’s new regulation could prevent thousands of premature deaths a year. See Sofiev et al. (2018), pp. 1–12.
- 51.
See The Economist, “Shipping: Smoke on the water,” 14 April 2018, p. 62.
- 52.
International Transport Forum, “Decarbonising Maritime Transport: Pathways to zero-carbon shipping by 2035,” OECD/ITF, 2018, available at https://www.itf-oecd.org/sites/default/files/docs/decarbonising-maritime-transport.pdf.
- 53.
InfluenceMap, “Corporate capture of the IMO,” available at https://influencemap.org/report/Corporate-capture-of-the-IMO-902bf81c05a0591c551f965020623fda.
- 54.
H. Heine and C. Figueres, “Polluters on the High Seas,” The New York Times, 6 April 2018, available at https://www.nytimes.com/2018/04/06/opinion/greenhouse-gases-international-shipping.html.
- 55.
World Energy Council Report Confirms Global Abundance of Energy Resources and Exposes Myth of Peak Oil, World Energy Council (Oct. 15, 2015), https://www.worldenergy.org/news-and-media/press-releases/world-energy-council-report-confirms-global-abundance-of-energy-resources-and-exposes-myth-of-peak-oil/ [https://perma.cc/5ZK6-8LNL].
- 56.
But see the views of Meghan O’Sullivan, who argues that fears of energy scarcity have given way to the reality of energy abundance. O’Sullivan (2017).
- 57.
IEA, ‘CO2 Emissions from Fuel Combustion: Highlights’ (IEA, 2017), available at www.iea.org/publications/freepublications/publication/CO2EmissionsfromFuelCombustionHighlights2017.pdf. Julian Simon questions this statement by arguing that the quantities of natural resources are not limited in the way we think they are. New reserves of natural resources are constantly discovered; others are yet to be discovered; and others are not yet economically viable. See Julian Simon, When Will We Run Out of Oil? Never!, http://www.juliansimon.com/writings/Ultimate_Resource/TCHAR11.txt [https://perma.cc/F87R-5BNV]. An example that might serve to illustrate Simon’s position can be found by comparing predictions concerning copper consumption and dwindling reserves made in the 1970s. “[I]n 1970, identified and undiscovered copper resources were estimated to contain … reserves of about 280 million metric tons of copper. Since then, almost 480 million metric tons of copper have been produced worldwide, but world copper reserves in 2014 were estimated to be 700 million metric tons of copper, more than double [the estimate] in 1970.” U.S. Dep’t of the Interior & U.S. Geological Surv., Mineral Commodity Summaries 2015, 191 (2015), https://minerals.usgs.gov/minerals/pubs/mcs/2015/mcs2015.pdf [https://perma.cc/FSJ5-HFNA].
- 58.
- 59.
For a comprehensive analysis of EU trade law, see Leal-Arcas (2019).
- 60.
Interestingly, China’s One Belt One Road Initiative, a massive infrastructure project, will have significant impacts on the energy market, with climate-related consequences. For further details on the initiative, see http://www.bbc.com/news/av/business-39881895/what-is-china-s-one-belt-one-road.
- 61.
It is interesting to note the separationist approach of mainstream economics, which has mainly focused on efficiency to the detriment of equity and sustainability considerations. Such approach has been heavily criticized by Herman Daly in his prolific work. See Daly (1997).
- 62.
Already in 1990 there was debate on the long-term interaction between the economy and the environment. See Faber et al. (1990), pp. 27–55.
- 63.
- 64.
- 65.
Such a question raises the following issue: do climate change agreements suffer from weak enforcement capacities that ultimately undermine their credibility as instruments of environmental protection? Conversely, are free-trade agreements surprisingly more likely to encourage compliance with environmental commitments than climate change agreements due to a system of encouragement and reward, driven by preferential market access? See Matisoff (2010), pp. 165–186; Morin and Jinnah (2018), pp. 541–565.
- 66.
- 67.
Lewis (2014).
- 68.
See for instance Abbott et al. (2016); Hale and Roger (2014), pp. 59–82; Abbott (2012), pp. 571–590; Gehring and Faude (2013), pp. 119–130; Newman and Zaring (2013), p. 244; Orsini et al. (2013a), pp. 27–39; Raustiala and Victor (2004), pp. 277–309; Slaughter and Zaring (2006); Keohane and Victor (2011), pp. 7–23; Slaughter (2002), p. 1041; Slaughter (2004); Kissinger (2014).
- 69.
Abbott and Snidal (2010), pp. 315–344; Berliner and Prakash (2014), pp. 217–223; Fransen and Burgoon (2014), pp. 583–619; Dashwood (2014), pp. 551–582; Green (2013), pp. 1–25; Borgatti et al. (1998), pp. 27–36; Borgatti et al. (2009), pp. 892–895; Easley and Kleinberg (2010); Sabel and Zeitlin (2011); Overdevest and Zeitlin (2012); Zeitlin (2011), pp. 187–206; Eberlein et al. (2013).
- 70.
- 71.
Richardson (2009), pp. 571–588; Snir and Ravid (2015); Thistlethwaite and Paterson (2015); Beckfield (2010), pp. 1018–1068; David and Westerhuis (2014); Heemskerk et al. (2016), pp. 68–88; Katz and Stafford (2010); Albareda and Waddock (2016); Bodin and Crona (2009), pp. 366–374; Janssen et al. (2006), p. 15; Carpenter and Brock (2008), p. 40; Faure et al. (2015); Kim (2013–14), pp. 980–991; Fenwick et al. (2014), pp. 3–9; Bernstein and Cashore (2004), pp. 33–63; Meidinger (2011), pp. 407–419; Potoski and Prakash (2013), pp. 273–294.
- 72.
- 73.
Pattberg and Stripple (2008), pp. 367–388.
- 74.
Ostrom (2009).
- 75.
- 76.
- 77.
Yamusa and Ansari (2013), pp. 151–156.
- 78.
‘Climatescope 2014: Mapping the Global Frontiers of Clean Energy Investment - Focus: Asia’ (Bloomberg New Energy Finance, 2014) 7.
- 79.
Interestingly, energy policy has different—and often competing—goals, including security of energy supply, reducing energy poverty and ensuring sustainability. All these goals could be met via renewable energy.
- 80.
Gunningham (2012), pp. 119, 130–131.
- 81.
Mohammed ElBaradei, ‘A Global Agency is Needed for the Energy Crisis’ Financial Times (23 July 2008); cited in Gunningham (2012), pp. 130–131.
- 82.
- 83.
Cherp et al. (2011), p. 75.
- 84.
Bradbrook (1996), pp. 193, 197.
- 85.
International Renewable Energy Agency, ‘Work Program and Budget for 2014–2015: Report of the Director-General’ (18 January 2014) A/4/3, para 16.
- 86.
- 87.
US Energy Information Administration, “International Energy Outlook 2017,” p. 19, available at https://www.eia.gov/outlooks/ieo/pdf/0484(2017).pdf. ‘The effects of economic growth assumptions on energy consumption are addressed in the High and Low Economic Growth cases. World gross domestic product (GDP) increases by 3.3%/year from 2015 to 2040 in the High Economic Growth case and by 2.7%/year in the Low Economic Growth case, compared with 3.0%/year in the Reference case.’ Ibid., p. 8.
- 88.
Some EU governments are trying to shut down coal plants; the industry has reacted. See “Finland considers speeding up ban on coal; industry reacts strongly,” Xinhuanet, 7 January 2018, available at http://www.xinhuanet.com/english/2018-01/07/c_136877044.htm; A. Vaugham, “UK government spells out plan to shut down coal plants,” 5 January 2018, available at https://www.theguardian.com/business/2018/jan/05/uk-coal-fired-power-plants-close-2025.
- 89.
- 90.
- 91.
- 92.
Walljasper, J. “Elinor Ostrom’s 8 Principles for Managing a Commons,” 2 October 2011, available at http://www.onthecommons.org/magazine/elinor-ostroms-8-principles-managing-commmons#sthash.9MPxgwbH.dpbs.
- 93.
- 94.
Bulkeley et al. (2012), pp. 591–612.
- 95.
Green (2010).
- 96.
Abbott (2012), pp. 571–590.
- 97.
Andrews-Speed, P. and Shi, X. (2015) “What Might the G20 under China’s Presidency Deliver for Global Energy Governance?” Energy Studies Institute Policy Brief 8.
- 98.
Meyer (2012), pp. 319–348.
- 99.
Leal-Arcas and Filis (2013a), pp. 1225–1301.
- 100.
- 101.
Raustiala and Victor (2004), pp. 277–309.
- 102.
Abbott and Snidal (2009), pp. 44–88.
- 103.
Alter and Meunier (2009), p. 13.
- 104.
- 105.
Yergin (2011).
- 106.
Akerlof and Shiller (2015).
- 107.
Rodrik (2011).
- 108.
Luciani (2013).
- 109.
Gault (2010), p. 9.
- 110.
Bordoff, Jason, “This Isn’t Your Father’s OPEC Anymore,” Foreign Policy, June 26, 2018.
- 111.
Jegen (2010), p. 73.
- 112.
Graetz (2011).
- 113.
Hawken (2010).
- 114.
- 115.
Leal-Arcas (2013a).
- 116.
de Jong, S. and Wouters, J. “Institutional Actors in International Energy Law,” Leuven Center for Global Governance Studies, Working Paper No. 115, July 2013.
- 117.
Haghighi (2007).
- 118.
- 119.
When we refer to renewables, unless specifically stated, we refer to renewable sources of energy, as juxtaposed with conventional energy sources such as hydrocarbons/fossil fuels (i.e., gasoline/petrol/oil, gas, and coal), and juxtaposed with other non-conventional sources that are, however, non-renewable—e.g., nuclear power.
- 120.
Oschmann (2008), p. 19.
- 121.
Regarding the reliability of both wind and solar energy, there is the concern that the wind does not always blow and the sun does not always shine. This means that energy storage solutions are necessary.
- 122.
- 123.
According to Daniel Schrag, “the timescale of decarbonisation is longer than many policy makers and climate change advocates imagine. Deep decarbonisation requires an array of new technologies […] and a new infrastructure that represents more than 500 years of construction at current rates. It seems unlikely to occur in just a few decades.” His own views of a credible timescale for decarbonization are:
Phase 1 (up to 2030–2050): greater penetration of wind and solar energy, backed by natural gas. Phase 2 (2040 to 2070): continuation of renewables; deployment of storage to manage intermittency of renewables; electrification of electric vehicles. Phase 3 (after 2060): carbon capture and storage for natural gas plants; biofuels. Lecture given by Daniel Schrag on 1 October 2018 at Harvard University.
- 124.
- 125.
Abbott (2012), pp. 571–590.
- 126.
Andrews-Speed, P. and Shi, X. (2015) “What Might the G20 under China’s Presidency Deliver for Global Energy Governance?” Energy Studies Institute Policy Brief 8.
- 127.
Meyer (2012), pp. 319–348.
- 128.
Leal-Arcas and Filis (2013a), pp. 1225–1301.
- 129.
- 130.
Raustiala and Victor (2004), pp. 277–309.
- 131.
Abbott and Snidal (2009), pp. 44–88.
- 132.
On forum shopping in global governance, see Alter and Meunier (2009), p. 13.
- 133.
Idealism placed hope in international law and institutions such as the United Nations.
- 134.
Realism views international institutions as having no impact on nation-state behaviour, since all international politics could be understood in terms of national interests.
- 135.
Krasner (1983).
- 136.
Halliday and Shaffer (2015).
- 137.
Jupille et al. (2013); Martin and Simmons (1998), pp. 397–419; Krasner (1983); Kingston, C. and Caballero, G. (2008) “Comparing Theories of Institutional Change,” available at https://www3.amherst.edu/~cgkingston/Comparing.pdf.
- 138.
- 139.
Von Bertalanffy (1968).
- 140.
- 141.
Energy Charter Treaty (opened for signature 17 December 1994, entered into force 16 April 1998) 2080 UNTS 95 (‘ECT’).
- 142.
- 143.
For instance China – Measures Concerning Wind Power Equipment (2010) (raised by the US against China in relation to subsidies for wind turbines); United States – Countervailing Duty Measures on Certain Products from China (2012) (launched by China against the US in relation to the price of Chinese solar panels and wind towers); European Union and certain Member States – Certain Measures Affecting the Renewable Energy Generation Sector (2012) (in which China requested WTO consultations with the EU, Greece, and Italy on several feed-in-tariff programs in support of solar energy generation that allegedly contained local content requirements (LCRs)); India – Certain Measures Relating to Solar Cells and Solar Modules (2013) (which was initiated by the US against Indian LCR provisions pertaining to solar cells and solar modules).
- 144.
The nationally determined contributions are an example of a bottom-up approach to climate change governance: it is up to countries to decide what is best for them in the fight against climate change and how to do it.
- 145.
Morosini (2010), pp. 713–748.
- 146.
S. Droege et al., “Mobilising Trade Policy for Climate Action under the Paris Agreement: Options for the European Union,” Stiftung Wissenschaft und Politik Research Paper, 2018.
- 147.
- 148.
Leal-Arcas (2012b), pp. 67–81.
- 149.
Leal-Arcas and Filis (2013a), pp. 1225–1301.
- 150.
Leal-Arcas and Filis (2013b), pp. 348–405.
- 151.
Bartels (2005).
- 152.
McKenzie (2018), pp. 255–271.
- 153.
Leal-Arcas (2008).
- 154.
Leal-Arcas (2010b).
- 155.
See for instance the proposal by Sugiyama and Sinton (2005), pp. 65–88. See also Barrett, S. “Climate Change and International Trade: Lessons on their linkage from international environmental agreements,” 2010, available at https://www.wto.org/english/res_e/reser_e/climate_jun10_e/background_paper6_e.pdf. On investment, see Leal-Arcas (2009), pp. 33–135.
- 156.
In the case of the environment, one can think of a carbon tax, where the consumer, and not the producer, is taxed. Such a tax would place the burden on the West (which is the main consumer of goods), as opposed to the rest. One could also design carbon taxes that exempt renewable energy. For an analysis of how taxes protect the environment, see Baumol and Oates (1971), pp. 42–54; Baumol (1972), pp. 307–322; Ekins (1994), pp. 571–579; Ekins (1999), pp. 39–62; Ekins (2009); Turner et al. (1998), pp. 121–136.
- 157.
In the fight against climate change, something as basic as transferring subsidies from the fossil-fuel industry to the renewables industry would be a very effective way to mitigate climate change and invest public funding intelligently. For an analysis of the funding spent on fossil fuel subsidies by the G7, see S. Whitley, et al., “G7 fossil fuel subsidy scorecard: tracking the phase-out of fiscal support and public finance for oil, gas and coal” June 2018, (where the authors argue that ‘On average per year in 2015 and 2016 the G7 governments gave at least $81 billion in fiscal support and $20 billion in public finance, for both production and consumption of oil, gas and coal at home and overseas’), available at https://www.odi.org/publications/11131-g7-fossil-fuel-subsidy-scorecard.
- 158.
See Bordoff (2009); Kendall (2012), p. 51ff; J. Hillman, ‘Changing Climate for Carbon Taxes. Who’s Afraid of the WTO?,’ The German Marshall Fund of the United States, Climate & Energy Policy Paper Series (July2013) at 1ff; J. Stiglitz ‘A New Agenda for Global Warming’ The Economists’ Voice, July 2006; Goh (2004), pp. 395–423; Babiker and Rutherford (2005), pp. 99–125; Pauwelyn (2012); J.P.M. Sijm and A. van Dril, “The Interaction between the EU Emissions Trading Scheme and Energy Policy Instruments in the Netherlands: Implications of the EU Directive for Dutch Climate Policies,” (INTERACT), 2003; Peat (2012), pp. 3–10; Sovacool (2017), pp. 150–163.
- 159.
See for instance Bacchus (2018b).
- 160.
See for instance IRENA, “Untapped potential for climate action: Renewable energy in nationally determined contributions,” International Renewable Energy Agency, 2017, available at http://www.irena.org/-/media/Files/IRENA/Agency/Publication/2017/Nov/IRENA_Untapped_potential_NDCs_2017.pdf.
- 161.
V. Sivaram, “The dark side of solar: How the rising solar industry empowers political interests that could impede a clean energy transition,” Brookings Institution, April 2018, available at https://www.brookings.edu/wp-content/uploads/2018/04/fp_20180416_dark_side_solar.pdf.
- 162.
Morocco is building a large solar-power plant in the Saharan Desert. See A. Neslen, “Morocco to switch on first phase of world’s largest solar plant,” The Guardian, 4 February 2016, available at https://www.theguardian.com/environment/2016/feb/04/morocco-to-switch-on-first-phase-of-worlds-largest-solar-plant. Dubai is doing the same. See D. Debusmann Jr, “Dubai’s $3.8bn solar park continues to break world records,” Arabian Business, 20 March 2018, available at http://www.arabianbusiness.com/energy/392315-dubais-38bn-solar-park-continues-to-break-world-records. These investments will help increase the electricity supply and cut energy subsidies.
- 163.
On the role of the law for the promotion of sustainable development, see Omorogbe (2008), p. 39.
- 164.
Int’l Energy Agency, WEO 2016 Electricity Access Database, http://www.worldenergyoutlook.org/resources/energydevelopment/energyaccessdatabase/ [https://perma.cc/MZP7-BU5Z].
- 165.
World Health Organization, “Fuel for life: Household energy and health,” p. 4, 2006, available at http://www.who.int/indoorair/publications/fuelforlife.pdf.
- 166.
This view is in contrast with that of Scott Pruitt, head of the Environmental Protection Agency under President Donald Trump. Mr Scott believes in true environmentalism, namely ‘using natural resources that God has blessed us with.’ See The Economist, “Lexington: Salting the Earth,” 27 January 2018, p. 40. A similar example is the planning of extraction of coal from Pakistan’s Thar Desert, which has the financial help of the China-Pakistan Economic Corridor. See The Economist, “Engro: Thar’s coal in the desert,” 3 February 2018, pp. 55–56. On the other hand, one would need to extract natural resources, many of which will come from developing countries, to make green technologies and therefore tech-based decarbonization efforts. This means that there will be an increase in the demand for such minerals. Therefore, the challenge is extracting the essential minerals and leaving fossil resources in the ground, and doing so in a sustainable manner. For an opposite view, see Abu Gosh and Leal-Arcas (2013), pp. 480–531.
- 167.
See Skymining, which proposes to replace fossil fuels. Available at https://skymining.com/index.html.
- 168.
For some preliminary work, see Leal-Arcas and Alvarez Armas (2018).
- 169.
Women Watch, “Gender Equality & Trade Policy” Resource Paper, 2011, available at http://www.un.org/womenwatch/feature/trade/gender_equality_and_trade_policy.pdf. But see also Dine (2005).
- 170.
The UNFCCC was adopted at the Rio Earth Summit. For an analysis of what went wrong at that summit, see Palmer (1992), p. 1005. Margatet Thatcher, former Prime Minster of the UK, already in 1989, three years before the creation of the UNFCCC, highlighted the danger posed by the increase of CO2 entering the atmosphere at a speech she gave at the UN General Assembly. See https://www.youtube.com/watch?v=VnAzoDtwCBg. Since that speech at the UN, the concentration of CO2 in the Earth’s atmosphere is much higher. One happy example of a country whose CO2 emissions have been falling annually since 1990 is the UK. This was due to removing coal drastically from the grid in recent years. See Z. Hausfather, “Analysis: Why the UK’s CO2 emissions have fallen 38% since 1990,” Carbon Brief, 4 February 2019, available at https://www.carbonbrief.org/analysis-why-the-uks-co2-emissions-have-fallen-38-since-1990.
- 171.
Interestingly, some twentieth-century trade agreements already contained reference to climate change or greenhouse gas (GHG) emissions reduction even before the UNFCCC was signed. Below are two excerpts from pre-1992 (the year when the UNFCCC was signed) agreements referring to GHGs effects and climate change:
“The Parties recognize the value of exchanging views, using existing consultation mechanisms under this Convention, on major ecological hazards, whether on a planetary scale (such as the greenhouse effect, the deterioration of the ozone layer, tropical forests, etc.), or of a more specific scope resulting from the application of industrial technology”. See Fourth ACP-EEC Convention signed at Lomé on 15 December 1989, Official Journal L 229, 17/08/1991 p. 0003 – 0280, Article 41.
“2. Cooperation shall centre on: […] - global climate change […]. 3. To these ends, the Parties plan to cooperate in the following areas: - […] - development of strategies, particularly with regard to global and climatic issues […].” See Europe Agreement between the European Communities and their Member States, of the one part, and the Republic of Hungary, of the other part, 1991, Official Journal L 347, 31/12/1993 p. 0002 – 0266, Article 79.
- 172.
On the interaction between the WTO and sustainable development, see the views of Marceau, G. and Morosini, F. “The Status of Sustainable Development in the Law of the World Trade Organization,” (8th November 2011), available at SSRN: https://ssrn.com/abstract=2547282.
- 173.
Marrakesh Agreement Establishing the World Trade Organization, Apr. 15, 1994, 1867 U.N.T.S. 154 (1994).
- 174.
Id. pmbl.
- 175.
This locution refers to trade agreements that touch upon environmental and social issues. It was first used to refer to the Trans-Pacific Partnership. See Everett Rosenfeld, Who Wins and Loses in ‘21 st Century Trade Agreement’, CNBC (Nov. 13, 2015), http://www.cnbc.com/2015/11/13/who-wins-and-loses-in-21st-century-trade-agreement.html [https://perma.cc/8PCM-NUCB].
- 176.
Bartels (2015).
- 177.
See, e.g., Trans-Pacific Partnership, chp. 19, Off. U.S. Trade Rep., https://ustr.gov/trade-agreements/free-trade-agreements/trans-pacific-partnership/tpp-full-text [https://perma.cc/5HVL-GSUJ]; see also Laura Puccio and Krisztina Binder, Trade and sustainable development chapters in CETA 11, European Parliament Research Service (Jan. 2017), http://www.europarl.europa.eu/RegData/etudes/BRIE/2017/595894/EPRS_BRI%282017%29595894_EN.pdf [https://perma.cc/GVT8-JMQ4].
- 178.
The Conference of the Parties (COP), described in Article 7 of the U.N. Framework Convention on Climate Change (UNFCCC), is the supreme decision-making body of the UNFCCC which meets on a yearly basis unless the parties decide otherwise. See UNFCCC, art. 7. The COP’s role is to promote and review the implementation of the UNFCCC. See id. It periodically reviews existing commitments in light of the convention’s objective, new scientific findings, and the effectiveness of national climate change programs, and can adopt new commitments through amendments and protocols. See id. In December 1997, at its third session (COP-3), it adopted the Kyoto Protocol, containing stronger emissions-related commitments for developed countries in the post-2000 period. See Kyoto Protocol to the United Nations Framework Convention on Climate Change, Dec. 11, 1997, 2303 U.N.T.S. 214 (1998). In 2015, at COP-21, the Paris Agreement was adopted. See Paris Agreement.
- 179.
COP22: Geneva-Based Agencies Highlight Important Role of Trade in Addressing Climate Change, U.N. Conf. on Trade and Dev. (Nov. 12, 2016), http://unctad.org/en/pages/newsdetails.aspx?OriginalVersionID=1379 [https://perma.cc/XE92-2QTZ].
- 180.
Id.
- 181.
Key Information About International Solar Alliance, Int’l Solar Alliance (Nov. 30, 2015), http://isolaralliance.org/projects.html [https://perma.cc/Y7LW-ADWK]. For a list of prospective countries of the International Solar Alliance, see id.
- 182.
For a map of the so-called global sunbelt, see Annual Solar Irradiance, Intermittency and Annual Variations, Green Rhino Energy, http://www.greenrhinoenergy.com/solar/radiation/empiricalevidence.php [https://perma.cc/95BK-23EW].
- 183.
Press Release, Gov’t of India, India’s Intended Nationally Determined Contribution is Balanced and Comprehensive: Environment Minister, Ministry of Environment, Forest and Climate Change (Oct. 2, 2015), http://pib.nic.in/newsite/PrintRelease.aspx?relid=128403 [https://perma.cc/3T5L-3TKY].
- 184.
In fact, according to the International Energy Agency (IEA), doubling world GDP by 2040 would require only a small rise in energy demand if countries adopted strict standards like Japan’s for the case of vehicle-fuel efficiency. The great winners of this prediction would be consumers and the climate. Greater efficiency makes energy cheaper. Therefore, consumers want more and benefits them. See The Economist, “Energy efficiency: Waste not, want more,” 27 October 2018, p. 72 (citing the prediction of the IEA).
- 185.
An unrelated but interesting fact to note here is that “a study conducted by Cranfield University found that 12,000 rose stems grown in Kenya incurred a carbon footprint of 2,200kg CO2, while the equivalent supply from Holland generated 35,000kg CO2. The Kenyan roses thrived outside in the sunshine, while the Dutch ones were grown in greenhouses heated by fossil fuels.” See C. Fry, “Tread lightly: Stop buying famed flowers,” The Guardian, 25 April 2008, available at https://www.theguardian.com/environment/ethicallivingblog/2008/apr/25/treadlightlystopbuyingfarm.
- 186.
Press Release, Gov’t of India, India’s Intended Nationally Determined Contribution is Balanced and Comprehensive: Environment Minister, Ministry of Environment, Forest and Climate Change (Oct. 2, 2015), http://pib.nic.in/newsite/PrintRelease.aspx?relid=128403.
- 187.
India, Submission of India’s Intended Nationally Determined Contribution to the U.N. Framework Convention on Climate Change, 29 (Oct. 1, 2015), http://www4.unfccc.int/submissions/INDC/Published%20Documents/India/1/INDIA%20INDC%20TO%20UNFCCC.pdf [https://perma.cc/68YU-SG43].
- 188.
James Bacchus, “Global Rules for Mutually Supportive and Reinforcing Trade and Climate Regimes,” 4 (Int’l Ctr. for Trade and Sustainable Dev. and World Econ. Forum 2016).
- 189.
- 190.
WTO, “Harnessing trade for sustainable development and a green economy,” available at https://www.wto.org/english/res_e/publications_e/brochure_rio_20_e.pdf.
- 191.
WTO Speeches – DG Pascal Lamy ‘The “Greening” of the WTO Has Started’ <https://www.wto.org/english/news_e/sppl_e/sppl79_e.htm>.
- 192.
This notion is in line with Sustainable Development Goal 8, available at https://sustainabledevelopment.un.org/sdg8. See also the views of Gregory Mankiw, stating that trade improves average living standards. See G. Mankiw, “Why Economists Are Worried About International Trade,” The New York Times, 16 February 2018, available at https://www.nytimes.com/2018/02/16/business/trump-economists-trade-tariffs.html.
- 193.
- 194.
One can think, for instance, of the argument that, if China and India bring millions of people into the middle class, the world will not be sustainable due to higher levels of consumption (of goods, food, energy) in these two countries. However, Sustainable Development Goal 12 (ensure sustainable consumption and production patterns) is about “promoting resource and energy efficiency, sustainable infrastructure, and providing access to basic services, green and decent jobs and a better quality of life for all.” See UN Sustainable Development Goals, Goal 12, available at http://www.un.org/sustainabledevelopment/sustainable-consumption-production/.
- 195.
- 196.
The withdrawal will not be effective until November 2020. Without the participation of the US in the Paris Climate Agreement, the Agreement will, nevertheless, cover around 80% of global GHG emissions. The US is responsible for around 16% of global GHG emissions. See http://www.wri.org/blog/2014/11/6-graphs-explain-world%E2%80%99s-top-10-emitters.
- 197.
- 198.
See Petersmann (2000), pp. 1363–1382 (arguing for a shift from negative integration found in the GATT 1947 (such as the elimination of technical barriers to trade) to positive integration found in the TRIPs Agreement, when it comes to integrating human rights into WTO law). This concept of positive integration based on the TRIPs Agreement can be emulated in the WTO context by setting global standards for CO2 emissions-reduction incentives.
- 199.
M. Dupre and S. Lere, “Trade and climate: How the EU can protect the Paris Agreement,” Euractiv, 28 February 2018, available at https://www.euractiv.com/section/climate-environment/opinion/trade-and-climate-how-the-eu-can-protect-the-paris-agreement/.
- 200.
Ibid.
- 201.
As of 2018, the EU was negotiating an FTA with Mercosur. The result of that negotiation may mean deforestation in Brazil. The EU should try to avoid that as well as the potential abuse of that future FTA regarding forest-risk commodities such as coco.
- 202.
Non-paper of the Commission services, “Feedback and way forward on improving the implementation and enforcement of Trade and Sustainable Development chapters in EU Free Trade Agreements,” 26 February 2018, available at http://trade.ec.europa.eu/doclib/docs/2018/february/tradoc_156618.pdf.
- 203.
For analyses of trade and sustainable development prior to the conclusion of the Paris Climate Agreement, see Leal-Arcas (2015b), pp. 248–264.
- 204.
EU-Singapore FTA, Chapter 13, available at http://trade.ec.europa.eu/doclib/docs/2013/september/tradoc_151766.pdf. On 13 February 2019, the trade and investment agreements between the EU and Singapore received the approval of the European Parliament. This means that the trade agreement could enter into force once Singapore concludes its own internal procedure and both parties complete the final formalities. See http://europa.eu/rapid/press-release_IP-19-906_en.htm.
- 205.
EU-Vietnam FTA, Chapter 15, available at http://trade.ec.europa.eu/doclib/docs/2016/february/tradoc_154229.pdf.
- 206.
On 6 July 2018, the EU Council of Ministers adopted a package of decisions on the Economic Partnership Agreement between the EU and Japan (EPA), including a decision on the signature of the Agreement and a decision to request the consent of the European Parliament for the conclusion of the Agreement. See Council Decision (EU) 2018/966 of 6 July 2018 at https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32018D0966. The Council also adopted a decision on the signing and provisional application of a Strategic Partnership Agreement (SPA) between the EU and Japan on 26 June 2018. “The SPA is the first-ever framework agreement between the EU and Japan. It seeks to strengthen cooperation and dialogue across a broad range of bilateral, regional and multilateral issues. It highlights the shared values and common principles that constitute the basis for the deep and long-lasting cooperation between the EU and Japan as strategic partners, including democracy, the rule of law, human rights and fundamental freedoms.” See Consilium, “EU-Japan: Council adopts decision to sign trade agreement,” 6 July 2018, available at http://www.consilium.europa.eu/en/press/press-releases/2018/07/06/eu-japan-council-adopts-decision-to-sign-trade-agreement/.
- 207.
Not yet signed; not yet in force. As of June 2018, and based on the findings in Opinion 2/15 of Advocate General Sharpston of the Court of Justice of the EU with respect to the EU-Singapore FTA, the EU is currently deciding whether all EU Member States should ratify the Agreement or whether to have a separate agreement with all the provisions that are outside the scope of the EU’s exclusive competence. For further analysis on mixed agreements, see Leal-Arcas (2008), chapter 5.
- 208.
For an analysis of this issue, see Condon (2017), pp. 675, 690; Van de Graaf and van Asselt (2017), p. 313; Wold et al. (2012), pp. 635,694; Burniaux and Chateau (2014), p. 71; Coady, D., Flamini, V., and Sears, L. ‘The Unequal Benefits of Fuel Subsidies Revisited: Evidence for Developing Countries’ (IMF Working Paper 15/250, November 2015), available at http://www.imf.org/external/pubs/ft/wp/2015/wp15250.pdf; David Coady et al. (2015), “How Large Are Global Energy Subsidies?” IMF Working Paper, WP/15/105.
- 209.
Parts of this section were written by Edoard Alvares.
- 210.
See Cottier et al. (2011); T. Cottier, O. Nartova, L. Rubini, S. Z. Bigdeli, S. Matteotti, and Y. Selivanova, “Background Note for the Second Biennial Global Conference of the Society of International Economic Law (SIEL), 8.07-10.07.2010 - Panel VII: Towards a WTO Framework Agreement on Trade in Energy”, Online Proceedings of the Society of International Economic Law, Working Paper No. 2010/40, p. 2.
- 211.
ICTSD (2011).
- 212.
GATT Article XX(g) reads as follows:
Subject to the requirement that such measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail, or a disguised restriction on international trade, nothing in this Agreement shall be construed to prevent the adoption or enforcement by any contracting party of measures:
[…]
(g) relating to the conservation of exhaustible natural resources if such measures are made effective in conjunction with restrictions on domestic production or consumption;
- 213.
The Economist, “The $100 billion bet,” 12 May 2018, p. 11.
- 214.
“The World’s Largest Solar Project,” Leaders K.S.A., Issue 17, May 2018, pp. 8–9, at 8.
- 215.
Idem.
- 216.
Idem.
- 217.
Cottier et al. (2011).
- 218.
Idem, p. 1.
- 219.
Idem, p. 21.
- 220.
Idem.
- 221.
T. Cottier, O. Nartova, L. Rubini, S. Z. Bigdeli, S. Matteotti, and Y. Selivanova, “Background Note for the Second Biennial Global Conference of the Society of International Economic Law (SIEL), 8.07-10.07.2010 - Panel VII: Towards a WTO Framework Agreement on Trade in Energy”, Online Proceedings of the Society of International Economic Law, Working Paper No. 2010/40, p. 2.
- 222.
Idem, p. 2.
- 223.
Idem., p. 2.
- 224.
See for instance Brewer (2011), pp. 516–526.
- 225.
Leal-Arcas, R. ‘International Trade for Climate Action and Inclusive Green Growth’ (Green Growth Knowledge, 1 February 2018) <www.greengrowthknowledge.org/blog/international-trade-climate-actionand-inclusive-green-growth>.
- 226.
- 227.
That said, the number of multilateral environmental agreements (MEAs) referred to in trade agreements is increasing. This is done for various reasons: to determine hierarchy between agreements or for purposes of interpretation, ratification or implementation of MEAs. See J.-F. Morin and C. Bialais, “Strengthening Multilateral Environmental Governance through Bilateral Trade Deals,” Centre for International Governance Innovation, Policy Brief No. 123, February 2018.
- 228.
Gonzalez, A. “Trade Agreements Under Attack: Can They Be Salvaged And Is It Worth It?” 24 October 2016, Huffpost, available at https://www.huffingtonpost.com/anabel-gonzalez/trade-agreements-under-at_b_12619314.html.
- 229.
Article 4.2 of the Paris Agreement reads: ‘Each Party shall prepare, communicate and maintain successive nationally determined contributions that it intends to achieve. Parties shall pursue domestic mitigation measures, with the aim of achieving the objectives of such contributions.’
- 230.
Nationally determined contributions (NDCs) “embody efforts by each country to reduce national emissions and adapt to the impacts of climate change.” See United Nations Framework Convention on Climate Change “Nationally Determined Contributions (NDCs),” available at http://unfccc.int/focus/items/10240.php. The idea with the NDCs is to make sure that the increase in the global average temperature is “well below 2 °C above pre-industrial levels.” See Paris Agreement on Climate Change, 12 December 2015, FCCC/CP/2015/L.9/Rev.1, p. 2. The NDCs are not legally binding.
- 231.
On the links between trade and the NDCs, see C. Brandi, “Strengthening climate-friendly trade elements in future nationally determined contributions,” Opinion, ICTSD, 10 May 2017, available at https://www.ictsd.org/opinion/strengthening-climate-friendly-trade-elements-in-future-nationally-determined.
- 232.
For further details on global public goods in the context of sustainability, Leal-Arcas (2017), pp. 801–877.
- 233.
The UNEP argues that cutting GHG emissions will not be enough to keep global warming within desired expectations and that GHGs must also be removed from the air. See UNEP, “The emissions gap report 2017,” chapter 7, available at https://wedocs.unep.org/bitstream/handle/20.500.11822/22070/EGR_2017.pdf.
- 234.
A case in point here would be a climate-investment facilitation agreement.
- 235.
On border tax adjustments, see Odell (2018).
- 236.
Arguably, the possibilities for addressing subsidies under WTO law in general have major limitations. See generally Peat (2012), p. 3.
- 237.
Examples of deglobalization and political threats to internationalism are Brexit, the US’s withdrawal from the Trans-Pacific Partnership, and President Trump’s idea of leaving the Paris Agreement on Climate Change, the Intermediate-range Nuclear Forces Treaty, and the world trading system. President Trump is an example of someone de-stabilizing international cooperative structures in environment, climate change, and trade. See for instance Donnan, S. “WTO faces an identity crisis as Trump weighs going it alone,” Financial Times, 6 December 2017, available at https://www.ft.com/content/38c56f52-d9a5-11e7-a039-c64b1c09b482?desktop=true&conceptId=a208e921-65cb-31b7-8a7c-3e4d0ddcdb53&segmentId=7c8f09b9-9b61-4fbb-9430-9208a9e233c8#myft:notification:daily-email:content:headline:html. It is interesting to observe that today anti-globalizers are in the North (developed world), whereas pro-globalizers are in the South (developing world). The losers of globalization are the poor of the rich world. For an analysis of winners and losers of globalization, see N. Lamp, “How Should We Think about the Winners and Losers from Globalization? Three Narratives and their Implications for the Redesign of International Economic Agreements,” Queen’s University Legal Research Paper No. 2018-102, 2018, available at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3290590.
- 238.
‘Each climate plan reflects the country’s ambition for reducing emissions, taking into account its domestic circumstances and capabilities.’ [emphasis added]. See http://unfccc.int/focus/items/10240.php.
- 239.
- 240.
Article 6.8 of the Paris Agreement.
- 241.
Paris Agreement, p. 2.
- 242.
‘The Paris Agreement requests each country to outline and communicate their post-2020 climate actions, known as their Nationally Determined Contributions (NDCs).’ See http://unfccc.int/focus/items/10240.php.
- 243.
Peru has a ministry for the environment as a result of the 2009 US-Peru Free Trade Agreement. See https://ustr.gov/trade-agreements/free-trade-agreements/peru-tpa.
- 244.
James Bacchus, “The Case for a WTO Climate Waiver,” Center for International Governance Innovation, November 2017, available at https://www.cigionline.org/publications/case-wto-climate-waiver?utm_source=climate-l&utm_medium=social&utm_campaign=cop23.
- 245.
Ibid.
- 246.
Esty (2002), pp. 7–22.
- 247.
Adding non-economic issues to the WTO agenda creates a legitimacy-enhancing effect of addressing these problems that clearly matter to the people who are now challenging the validity of the WTO’s objectives. The counterargument, however, would be whether economists and trade law professionals have the necessary tools to tackle environmental and social concerns.
- 248.
There is the so-called Friends of Fossil Fuel Subsidy Reform, which is “a group of countries committed to supporting the reform of inefficient fossil-fuel subsidies.” See Global Subsidies Initiative, available at https://www.iisd.org/gsi/about/who-we-work-with/friends-fossil-fuel-subsidy-reform. The International Monetary Fund has studied the cost of energy subsidies, available at https://www.imf.org/en/News/Articles/2015/09/28/04/53/sonew070215a. The Overseas Development Institute has also studied the social cost of fossil-fuel subsidies: Ipek Gencsu et al., “Phase-out 2020: monitoring Europe’s fossil fuel subsidies,” 2017, available at https://www.odi.org/publications/10939-phase-out-2020-monitoring-europes-fossil-fuel-subsidies.
- 249.
Leading scholars of international governance, Robert Keohane and David Victor, argue that the diverse range of institutions involved in climate change governance constitutes a regime complex, which has advantages and disadvantages compared to a unitary international regime. Keohane and Victor (2011), pp. 7–23.
- 250.
Wuebbles, D.J., D.W. Fahey, K.A. Hibbard, B. DeAngelo, S. Doherty, K. Hayhoe, R. Horton, J.P. Kossin, P.C. Taylor, A.M. Waple, and C.P. Weaver, 2017: Executive Summary of the Climate Science Special Report: Fourth National Climate Assessment, Volume I [Wuebbles, D.J., D.W. Fahey, K.A. Hibbard, D.J. Dokken, B.C. Stewart, and T.K. Maycock (eds.)]. U.S. Global Change Research Program, Washington, DC, USA, 26 pp.
- 251.
Putting a price on carbon (whether a carbon tax or an emissions trading scheme, i.e., tradable permits) is a way to combat climate change by making people pay for the environmental damage created. A carbon tax provides an added cost to the cost of the product. A tradable permit system sets a cap on the amount of GHG emissions. Firms must buy a permit to emit and there is only a limited number of permits. The cost of the permit is an added cost to the cost of the product. The price is based on the carbon content of the product. Doing so provides an incentive to find low-cost ways to reduce GHG emissions. If a measure costs less than the price, it would make sense to implement the measure, rather than paying the price. If a measure costs more than the price, it would make sense to pay the price. Conversely, people should be rewarded for protecting the environment. There are ethical considerations with putting a price on carbon because it affects the poor the most. Ideally, there should be harmonized carbon taxes, i.e., have the same carbon tax in all countries. See Nordhaus (2007).
- 252.
Even the US Supreme Court ruled in 2007 that GHGs are a risk to human health. See Massachusetts v. EPA, 549 U.S. 497 (2007). There is a vast body of literature on the links between human rights and environmental protection: Edward Cameron, “Development, climate change and human rights: From the margins to the mainstream?” 123 World Bank Social Development Working Papers [2011]; Handl (2001); Padilla (2002), pp. 69–83; Rosemary Rayfuse and Emily Crawford, “Climate Change, Sovereignty and Statehood,” University of Sydney Legal Studies Research Paper 11/59 (2011); Barnett and Neil Adger (2007), pp. 639–655; Bosello et al. (2006), pp. 579–591; Pontin (2002), p. 21; Dam and Tewary (2005), p. 383; Kravchenko and Bonine (2008), Ch. 12.
- 253.
These recommendations draw from Bacchus, James, Leal-Arcas, R., et al. (2016) “Global Rules for Mutually Supportive and Reinforcing Trade and Climate Regimes,” E15 Expert Group on Measures to Address Climate Change and the Trade System – Policy Options Paper. E15Initiative. Geneva: International Centre for Trade and Sustainable Development (ICTSD) and World Economic Forum.
- 254.
Most-favored-nation treatment (GATT Article I, GATS Article II, and TRIPs Article 4) is the principle of not discriminating between one’s trading partners.
- 255.
National treatment (GATT Article III) is the principle of giving others the same treatment as one’s own nationals.
- 256.
For an overview of global energy subsidies, see IEA, ‘Energy Subsidies’ (IEA, 2016), available at www.iea.org/statistics/resources/energysubsidies/. See also Benjamin K Savacool, ‘Reviewing, Reforming, and Rethinking Global Energy Subsidies: Towards a Political Economy Research Agenda’ (Sussex, 2017), available at http://sro.sussex.ac.uk/66350/3/Sovacool-Subsidies-070616.pdf.
- 257.
See generally World Bank and Ecofys. 2018. “State and Trends of Carbon Pricing 2018 (May)”, by World Bank, Washington, DC.
- 258.
A carbon tax may not be so easy to implement, as seen in the case of France in 2018 with the gilets jaunes, who refused to accept a high fuel tax proposed by President Macron.
- 259.
The idea of a cap-and-trade system or a carbon tax in countries with high levels of corruption is ludicrous because the authorities would take the revenue.
- 260.
The cap-and-trade system caps the GHG emissions to gradually reduce them.
- 261.
Ian Parry, Victor Mylonas, and Nate Vernon, “Mitigation policies for the Paris agreement: An assessment for G20 countries”, IMF Working Paper, 2018. See also Haites et al. (2018), pp. 109–182.
- 262.
The Economist, “Free exchange: When the levy breaks,” 18 August 2018, p. 62. See also Stern et al. (2018), pp. 669–677.
- 263.
Climate Leadership Council, “The conservative case for carbon dividends,” February 2017, available at https://www.clcouncil.org/wp-content/uploads/2017/02/TheConservativeCaseforCarbonDividends.pdf.
- 264.
The countries that subsidize energy (whether natural gas, electricity, or oil) the most are Iran, Saudi Arabia, Russia, and Venezuela.
- 265.
- 266.
A more efficient allocation of resources promotes economic growth.
- 267.
The movement was largely led by Oil Change International, Friends of the Earth U.S., the Sierra Club, and WWF European Policy Office, which are the organizations listed as “publishers” of the report mentioned below.
- 268.
Via the publication of a report entitled “Talk is cheap: How G20 Governments are financing climate disaster”, available online on October the 4th 2017 (http://priceofoil.org/content/uploads/2017/07/talk_is_cheap_G20_report_July2017.pdf).
- 269.
Oil change international, “Talk is cheap: How G20 Governments are financing climate disaster”, http://priceofoil.org/2017/07/05/g20-financing-climate-disaster/, available online on October the 4th 2017.
- 270.
Green Tech Media, “Denmark Preparing to End Renewable Energy Subsidies: ‘We’re Now Very Close’”, https://www.greentechmedia.com/articles/read/denmark-preparing-to-end-renewable-energy-subsidies#gs.BRG0_xo, available online on October the 4th 2017.
- 271.
For a discussion on subsidies and renewable energy, see Peat (2012).
- 272.
The International Monetary Fund and the Organization for Economic Cooperation and Development have done useful work on the question of defining and measuring fossil fuel subsidies. See for instance Coady, D. et al., “How large are global energy subsidies?” IMF Working Paper WP/15/105, 2015. A useful tool on questions of defining and categorizing various types of subsidies is the WTO Agreement on Agriculture.
- 273.
The international community should find ways to reduce both the strong influence wielded by industries benefiting from fossil fuel subsidies and the hesitance of political leaders, even those generally committed to environmental issues, to take a stand publicly despite growing awareness of such measures’ economic and environmental repercussions. For a study on the benefits of fuel subsidies, see David Coady, Valentina Flamini, and Louis Sears, ‘The Unequal Benefits of Fuel Subsidies Revisited: Evidence for Developing Countries’ (IMF, November 2015), http://www.imf.org/external/pubs/ft/wp/2015/wp15250.pdf. See also Peter Wooders and Cleo Verkuijl, ‘Making the International Trade System Work for Climate Change: Five Ways to Address Fossil Fuel Subsidies through the WTO and International Trade Agreements’ (International Institute for Sustainable Development, 20 June 2017).
- 274.
At the moment, the GPA comprises only 47 WTO members out of 164 members. See https://www.wto.org/english/tratop_e/gproc_e/gp_gpa_e.htm.
- 275.
A case in point is California, whose officials upheld a mandate in December 2018 to require rooftop panels on new homes from 2020. A 30% federal tax credit was used as an example of a generous subsidy. See The Economist, “Distributed energy: Solar eclipsed,” 22 December 2018, pp. 91–94, at 91.
- 276.
That said, Germany has invested $1trn on low-carbon electricity and yet still depends at 50% on fossil fuels for its power. See “Negative emissions: What they don’t tell you,” The Economist, 18 November 2017, p. 12. One simple way to get to negative emissions is by planting more forests. According to The Economist, “even with negative emissions carbon-dioxide release still needs to fall by 45% or thereabouts by 2030. […] two-thirds of coal use must be phased out in little more than a decade. By the middle of the century virtually all electricity must come from carbon-free sources (up from a quarter today), and all cars will need to run on electric motors […], as will trains and most ships.” The Economist, “Global Warming: War was is better than jaw jaw,” 13 October 2018, pp. 76–77, at 77.
- 277.
See for instance the electric bicycles produced by BYD Auto Co., a Chinese automobile manufacturer.
- 278.
See A Flash in the Sky, The Economist, July 15, 2017, at 16–17.
- 279.
All of this said, in the case of cars, their sales are falling because better cars and roads mean longer car life, which means fewer new-car sales, and it is a headwind for electric vehicles. See Kyle Stock, The Real Reason Car Sales Are Falling, Bloomberg, (Aug. 2, 2017), https://www.bloomberg.com/news/articles/2017-08-02/the-real-reason-car-sales-are-falling.
- 280.
The idea of becoming renewable goes beyond the mobility sector. See M. Safi, “India plans nearly 60% of electricity capacity from non-fossil fuels by 2027,” The Guardian, 22 December 2016.
- 281.
Business, The Economist, July 29, 2017, at 8.
- 282.
See id.
- 283.
Adam Vaughan, All Volvo Cars to be Electric or Hybrid from 2019, The Guardian, (July 5, 2017), https://www.theguardian.com/business/2017/jul/05/volvo-cars-electric-hybrid-2019.
- 284.
Cleaning Up Cars, The Economist, Sept. 30, 2017, at 31.
- 285.
Electric Cars in China: Zooming Ahead, The Economist, Sept. 30, 2017, at 68.
- 286.
See id.
- 287.
However, battery production is not emissions free. See Charge of the Battery Brigade, The Economist, Sept. 9, 2017, at 63–64.
- 288.
The irony with transportation is that tickets for some flights are cheaper than train tickets, which does not help to mitigate climate change.
- 289.
Leal-Arcas (2013a).
- 290.
Let’s Twist Again, The Economist, Sept. 16, 2017, at 82.
- 291.
One should add that, in April 2018, the IMO pledged to halve annual emissions from ships by 2050 compared with the 2008 levels, thereby making a statement that the IMO is serious about environmental protection. See IMO, “UN body adopts climate change strategy for shipping,” available at http://www.imo.org/en/mediacentre/pressbriefings/pages/06ghginitialstrategy.aspx.
- 292.
“World fleet se to double in next 20 years,” 26 July 2018, Aviation job search, available at https://blog.aviationjobsearch.com/world-fleet-set-to-double-in-next-20-years/.
- 293.
In 2010, transportation (namely the movement of people and goods by cars, trucks, trains, ships, airplanes, and other vehicles) represented 14% of global greenhouse gas emissions. See US Environmental Protection Agency, “Sources of Greenhouse Gas Emissions,” available at https://www.epa.gov/ghgemissions/global-greenhouse-gas-emissions-data.
- 294.
That said, there are already companies that make two-seater electric training planes. See for instance the E-fan, available at https://www.siemens.com/innovation/de/home/pictures-of-the-future/mobilitaet-uns-antriebe/die-zukunft-der-mobilitaet-e-fan-x.html.
- 295.
“Commercial aviation: The electric-flight plan,” The Economist, 2 December 2017, pp. 69–70, at 70.
- 296.
Ibid., at 69. According to The Economist, Samsung Electronics said that by incorporating graphene into a lithium-ion battery, it managed to maximize its energy capacity by 45%. Ibid., at 70. It will be interesting to see whether Chile, a very rich country in lithium, will end up a new Saudi Arabia as a result of large amounts of lithium.
- 297.
Environmental Goods Agreement, Off. U.S. Trade Rep., https://ustr.gov/trade-agreements/other-initiatives/environmental-goods-agreement [https://perma.cc/P8NX-8Z8T].
- 298.
For a list of fifty-four environmental goods on which leaders of the Asia-Pacific Economic Cooperation (APEC) member-States have committed to reduce or eliminate tariffs, see Annex C – APEC List of Environmental Goods, APEC (Sept. 8, 2012), http://www.apec.org/Meeting-Papers/Leaders-Declarations/2012/2012_aelm/2012_aelm_annexC.aspx [https://perma.cc/WL98-T5XT].
- 299.
U.N. Env’t Program, Green Jobs: Towards Decent Work in a Sustainable, Low-Carbon World 3–4, 33–34, 284 (2008), http://digitalcommons.ilr.cornell.edu/cgi/viewcontent.cgi?article=1057&context=intl [https://perma.cc/CQ49-62SJ].
- 300.
For views on the negative impact of GHG emissions on human health due to air pollution, see World Health Organization, ‘Air Pollution’ (World Health Organization, 2017), available at www.who.int/airpollution/en/.
- 301.
For a thorough analysis, see Leal-Arcas et al. (2018).
- 302.
On climate change and the elimination of trade barriers, see Frey (2016). On fossil fuel subsidies in the maritime and aviation realms, see Michael Keen, Ian Parry, and Jon Strand “The (non-) taxation of international aviation and maritime fuels: Anomalies and possibilities,” 2014, available at http://voxeu.org/article/non-taxation-international-aviation-and-maritime-fuels-anomalies-and-possibilities.
- 303.
See for instance the sustainability views of the Chinese Communist Party regarding the belt and road initiative: “Guidance on Promoting Green Belt and Road,” 2017, available at https://eng.yidaiyilu.gov.cn/zchj/qwfb/12479.htm. See also Parking, B. “China assumes green power mantle, leaving Germany, U.S. behind,” Bloomberg, 5 December 2017, available at https://www.bloomberg.com/news/articles/2017-12-05/china-assumes-green-power-mantle-leaving-germany-u-s-behind.
- 304.
Huang et al. (2011), pp. S9–S13.
- 305.
According to The Economist, ‘Mr Springmann and his colleagues have calculated that in 2050 GHG emissions from agriculture in a vegan world would be 70% lower than in a world where people ate as they do today; in the “healthy global diet” world they would be 29% lower.’ See The Economist, “The retreat from meat,” pp. 21–23, at p. 23, 13 October 2018.
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Leal-Arcas, R. (2019). Linking International Trade to Climate Change and Energy. In: Solutions for Sustainability. European Yearbook of International Economic Law(). Springer, Cham. https://doi.org/10.1007/978-3-030-23933-6_3
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