The spectre of carbon border-adjustment measures

Abstract

Carbon border adjustments raise fears amongst both the community of climate/international environmental lawyers and trade lawyers. To the latter they risk taking the form of unjustifiable barriers to trade and may sit uneasily with the body of WTO law concerning trade and the environment. To the former constituency such measures are yet more difficult, both buttressing emission reduction policies and measures that are vulnerable to carbon leakage whilst raising issues for fundamental principles such as CBDR and sustainable development. This paper addresses these concerns in the context of US and EU measures, considering them in the light of WTO case law and in particular the Brazil-Tyres dispute. The US measures, contained principally in the Waxman-Markey Bill, are of interest despite their demise for the parallels that they share with the steps taken by the EU in its Climate Change Package.