| Abstract: |
The global climate regime, as represented by the Kyoto Protocol, may be on a
collision course with the global trade policy regime, as represented by the
WTO (World Trade Organization). Environmentalists fear that international
trade will undercut reductions in greenhouse gas emissions as dirty production
migrates to non-participating countries, a phenomenon known as leakage.
Meanwhile businesspeople fear the effects on their own competitiveness of the
same phenomenon. These fears have now become prominent in the policy-making
process. In early 2008, legislation to enact long-term targets for reduced
emission of greenhouse gases included provisions for possible barriers against
imports from countries perceived as non-participating--in both Washington, DC
(where the bills have not yet passed) and in Brussels (where the EU Commission
Directive has gone into effect). Such provisions could be interpreted as
violations of the rules of the WTO, which poses the nightmare scenario of a
WTO panel rejecting a major country's climate change legislation. In light of
the hostile feelings that such a scenario would unleash, it would be a
nightmare for the supporters of the WTO and free trade as much as for the
supporters of the Kyoto Protocol and environmental protection. The issue is
just the latest and largest instance of fears among many environmentalists
that the WTO is an obstacle to their goals in general. The issue transcends
institutions. For the critics, the WTO is a symbol of globalization, and their
fears attach also to that larger phenomenon. The first part of this paper
discusses the broader issue of whether environmental goals in general are
threatened by free trade and the WTO. The second half of the paper focuses
exclusively on the narrower question of trade aspects of nations' efforts to
implement climate change policy and whether they are likely to come into
conflict with the WTO. |