Coordinating UK trade and climate policy ambitions: A legislative and policy analysis

Emily Lydgate,Chloe Anthony

doi:10.1177/1461452920960349

Abstract

The UK Government has pledged to achieve net-zero carbon emissions by 2050 but also champion open multilateral trade and pursue new trade relationships with geographically distant partners. The dynamism of policymaking in both areas, as the UK leaves the EU, provides a useful case study for the larger question of how to reconcile liberal trade policy with a net-zero target. After setting out the relevance of trade policy to the climate target, we examine areas at their intersection: current and proposed UK green subsidies, regulatory trade barriers, potential carbon border adjustment, fossil fuel subsidies and free trade agreements. We apply two analytical tests: compliance with relevant World Trade Organisation obligations and coherence with the net-zero climate target. The analysis is hindered by uncertainty, primarily regarding the extent of future global climate ambition, but there are clear areas in which the UK could strengthen its approach to climate change mitigation without undermining its commitment to open trade. Barring a major increase in global ambition, achieving the net-zero target will, however, likely require new trade restrictions. The implication is that, rather than being situated at the margins, the climate target must comprise a central objective of trade strategy.

Highlights

An existential question facing the UK Government is whether, and how, it can be world-leading both in promoting liberal trade and in achieving its net-zero climate target
The UK makes a interesting case study for such an analysis. As it leaves the EU, the UK is for the first time formulating an independent trade policy at the same time as it commits to a net-zero target; policy formation in these areas requires critical analysis, in respect of the integration of trade and climate policy
We argue that, despite the fact that UK domestic legislation does not directly encompass traderelated emissions, the UK likely cannot achieve even a domestic target without considering its impacts for trade policy

Summary

Introduction

An existential question facing the UK Government is whether, and how, it can be world-leading both in promoting liberal trade and in achieving its net-zero climate target. A body of academic literature delves into the relationship between international trade rules and climate policy, notably in the areas of green subsidies[2] and border carbon adjustment (BCA).[3] But there are few analyses examining the relationship of policies across national net-zero targets and trade law and policy. Coherence refers to ensuring trade patterns and trade policy do not undermine climate change mitigation, even if falling outside the direct remit of the UK Climate Change Act’s domestic focus.[4] In so doing, we aim to counteract a tendency in both the academic and policy communities to separate trade and climate policy or to examine them in terms of narrow thematic issues rather than across the policy spectrum This analysis, which is broad but not comprehensive,[5] is subject to significant uncertainty. Notable omissions are liberalisation of environmental goods, anti-dumping duties or issues specific to trade with developing countries

Questions regarding the UK’s approach to subsidies are set out here

Conclusion

Findings

Declaration of conflicting interests