The Prospects of Trade and Climate Disputes before the WTO

Abstract

Disputes related to environmental protection and, more recently, also climate change have played a major role in the history of WTO dispute settlement. The balancing of trade and non-trade concerns may be further put to the test with the gradual strengthening of climate action. Although an outright clash between international trade law and multilateral climate treaties has yet to materialize, a new generation of trade disputes has emerged, revolving around governmental efforts to boost low-carbon industries. These disputes have reignited a debate on the role of the WTO in promoting environmental and climate change protection. Considering the possible role of the WTO, this chapter analyses the prospects of climate-related disputes before the WTO. To offer some necessary context, the chapter begins by recapitulating the relationship between the WTO and the environment in general, and climate change in particular. The chapter then moves on to an analysis of the main climate-related disputes thus far, distinguishing between disputes focused on renewable energy support measures and disputes related to bio-fuels. Next, the chapter looks at possible future climate-related disputes, with a focus on border carbon adjustments and fossil fuel subsidies. Arguing that the WTO dispute settlement system is not well placed to deal with the precarious balancing act involved in a trade and climate dispute, the chapter offers suggestions for the way forward for WTO dispute settlement.