Reconciling trade and climate: How the WTO can help address climate change

Reconciling Trade and Climate: How the WTO Can Help Address Climate Change

Volumn , Issue , 2010, Pages

  Epps, Tracey ^a   Green, Andrew ^b  

^a New Zealand Ministry of Foreign Affairs and Trade   (New Zealand)

^b UNIVERSITY OF TORONTO   (Canada)

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EID: 84870050527     PISSN: None     EISSN: None     Source Type: Book    
DOI: None     Document Type: Book

References (287)

1. IPCC, Climate Change 2007: Synthesis Report. Contribution of Working Groups I, II and III to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change (Geneva: IPCC, 2007) (IPCC FAR (2007)). See also International Scientifi c Steering Committee, Avoiding Dangerous Climate Change: International Symposium on the Stabilization of Greenhouse Gas Concentrations (Exeter, 2005).
2. See Chapter 2 for a more detailed discussion of the theory relating to mitigating climate change and fostering trade and development
3. Available online at http://unfccc.int/resource/docs/2009/cop15/eng/o7.pdf (date accessed: 22 January 2010). It should be noted that 193 signatories to the UN climate convention - those represented in the Alliance of Small Island States, the Least Developed Countries, and the Africa Group - all warned at the Copenhagen Conference of the Parties in December 2009 that 1.5 degrees is the absolute limit and that 2 degrees would mean hardship, mass migrations, and even death for many of their citizens. Bridges Copenhagen Update, 'High- level Politics Meets Low Ambition: Taking Stock of COP15' (International Centre for Trade and Sustainable Development, Geneva, 2009).
4. N. Stern, The Economics of Climate Change: The Stern Review (Cambridge: Cambridge University Press, 2007).
5. As discussed in Chapter 2, there are some potentially welfare enhancing rationales for trade barriers or measures but the general case is that trade barriers reduce economic effi ciency. See Michael Trebilcock and Robert Howse, The Regulation of International Trade, 3rd edn (London: Routledge, 2005).
6. Protectionism, as noted by Levy, tends to be seen as anything other than advocacy of free trade. Levy suggests treating protectionism as the advocacy of policies that are intended to favour domestic producers over foreign exporters. He classifi es three types of protectionist measures: (1) intentional protectionism, where measures are explicitly intended to favour domestic industry over imports; (2) incidental protectionism, where measures can be justifi ed on other grounds but also have the eff ect of obstructing import competition; and (3) instrumental protectionism, which describes a growing set of policies in which trade actions are used as a lever to change another country's policies. Philip I. Levy, 'Protectionism in the Global Economy' (2009) Georgetown Journal of International Aff airs.
7. Jeff rey D. Sachs, The End of Poverty: Economic Possibilities for Our Time (New York: The Penguin Press, 2005).
8. Amartya Sen, Development as Freedom (New York: Knopf, 1999)
9. See, for example, Doaa Abdel Motaal, 'The Biofuels Landscape: Is There a Role for the WTO?' (2008) 42 (1) Journal of World Trade 61
10. Scott Barrett, Why Cooperate? The Incentive to Supply Global Public Goods (Oxford: Oxford University Press, 2007). A public good is one whose benefi t is shared by either the public as a whole or a sub- group thereof. It has two characteristics that are the opposite of those defi ning private goods: (i) it is impossible or too expensive for the supplier to exclude those who do not pay for the benefi t (nonexcludability); and (ii) consumption by one person does not leave less for others to consume (non- rivalrous competition). Richard D. Smith et al., Global Public Goods for Health: Health Economics and Public Health Perspectives (New York: Oxford University Press, 2003) at 4.
11. Kennedy School of Government Working Paper No. RWP02-031, 2002). 1 Intergovernmental Panel on Climate Change (IPCC), Climate Change 2007: Synthesis Report: Summary for Policymakers (Fourth Assessment Report, available online at: www.ipcc.ch). 2 The World Development Report 2010 cites H.M. Füssel, 'The Risks of Climate Change: A Synthesis of New Scientifi c Knowledge Since the Finalization of the IPCC Fourth Assessment Report', Background note for the WDR 2010, and V. Ramanathan and Y. Feng, 'On Avoiding Dangerous Anthropogenic Interference with the Climate System: Formidable Challenges Ahead' (2008) 105(38) Proceedings of the National Academy of Sciences 14245-50.
12. In the World Bank, World Development Report 2010: Development and Climate Change (Washington, DC: The World Bank, 2010) at 76. There has been a recent backlash against the fi nding of human- induced climate change, in part fuelled by a set of emails relating to climate change data. For a sceptical view, see, for example, Bjorn Lomborg, Cool It (New York: Knopf, 2007) (arguing that while humans are responsible for climate change, many claims of climate activists are 'wildly exaggerated'). 4 IPPC, supra note 1. The combustion of coal, oil, and natural gas contributes around 80% of the carbon dioxide emitted annually, with land- use changes and deforestation accounting for the remaining 20%. In 1950 the contributions from fossil fuels and land use were almost equal but since then energy use has grown by a factor of 18. Concentrations of other GHGs, including methane and nitrous oxide, have also increased signifi cantly as a result of fossil fuel combustion, farming and industrial activities, and land- use changes. World Development Report, ibid. at 71-2. 5 N.
13. Stern, The Economics of Climate Change: The Stern Review (Cambridge: Cambridge University Press, 2007). 6 Costs in this sense include not only fi nancial but also social and environmental costs. 7 Of course, developed countries also are experiencing and will experience the direct and indirect eff ects of climate change. See, for example, Andrew T. Guzman and Jody Freeman, 'Sea Walls Are Not Enough: Climate Change and U.S. Interests' (2009) Columbia Law Review. 8 Climate and Ozone Depletion Teaching Pack, Atmosphere, Climate and Environment Information Programme, Teaching Pack, aric, Manchester Metropolitan University (available online at: www.ace.mmu.ac.uk, date accessed: 1 February 2010). By contrast, the warming eff ect of methane emissions lasts for only a few decades, while that of aerosols lasts for only days to weeks. World Development Report, supra note 2 at 72. 9 An individual is self- centred and self- interested if she chooses to maximize her own welfare in a way that is not aff ected either by the interests of others or by moral issues such as fairness. See, for example, A. Sen, Rationality and Freedom (2002), at 30 and 213. Sen argues that rational choice has tended to view individuals as having three types of private reasons for acting: (i) self- centred welfare (an individual's welfare depends on her own consumption); (ii) self- welfare goal (the individual's goal is to maximize her own welfare); and (iii) self- goal choice (an individual's choices are guided by meeting her own goals).
14. See A. Green 'You Can't Pay Them Enough: Subsidies, Environmental Law and Social Norms' (2006) 30 (2) Harvard Environmental Law Review 407, which discusses the relationship between rational choice theory and social norms and values in individuals' choices relating to climate change.
15. See, for example, Alan O. Sykes, 'International Law', in A. Mitchell Polinsky and Steven Shavell (eds), Handbook of Law and Economics, Vol. I (Amsterdam: Elsevier, 2007), discussing the rational actor model of state behaviour. For the strong form rational choice view of state action, see Jack L. Goldsmith and Eric A. Posner, The Limits of International Law (Oxford: Oxford University Press, 2005).
16. See Robert Baldwin and Martin Cave, Understanding Regulation: Theory, Strategy, and Practice (New York: Oxford University Press, 1999) at 19
17. In 1971, Stigler wrote a seminal article in which he stated that, as a rule, regulation is acquired by industry and is designed and operated primarily for its benefi t. That is, industry 'captures' the regulatory agency and uses regulation to prevent competition. George J. Stigler, 'The Theory of Economic Regulation' (1971) 1 Bell Journal of Economics 3. For other material related to public choice theory, see Mancur Olson, The Logic of Collective Action (Cambridge, MA: Harvard University Press, 1971), Anthony Downs, The Economic Theory of Democracy (New York: Harper, 1957) and Dennis Mueller, Public Choice III (Cambridge: Cambridge University Press, 2003).
18. See Jutta Brunnée and Stephen J. Toope, Legitimacy and Persuasion in International Law (Cambridge: Cambridge University Press, forthcoming).
19. A. Guzman, 'The Promise of International Law' (2006) 92 Virginia Law Review 533 (noting that reputation turns one- shot games into repeat games and allows cooperative solutions to problems) and Andrew T. Guzman, 'Reputation and International Law' (2006) 34 Georgia Journal of International and Comparative Law 379
20. See Scott Barrett, Why Cooperate? The Incentive to Supply Global Public Goods (Oxford: Oxford University Press, 2007) (describing reducing concentrations of GHG in the atmosphere as an additive or 'aggregate eff orts' public good as opposed to a 'single best eff orts' public good (such as stopping an asteroid from hitting the earth), which can rely on unilateral action, or a 'weakest link' public good (such as stopping the spread of a disease), which depends on every country being involved)
21. Amartya Sen, Development as Freedom (New York: Anchor Books, 1999), at 74
22. K. Anderson and William Martin, Agricultural Trade Reform and the Doha Development Agenda (Washington, DC: World Bank, 2005). There is a need to attend to the distributional impacts related to the gains from trade. See Jeff rey Sachs, The End of Poverty (New York: Penguin, 2005) (arguing that while trade is important to provide growth to developing countries, there is still a need for other measures (including aid and institutional reform) to ensure that developing countries benefi t from the economic activity arising from more liberalized trade). See also Paul Krugman, 'Trade and Inequality, Revisited' Vox (15 June 2007) (arguing for the importance of taking into account the distributional impacts of freer trade even in developed countries).
23. There is a debate about whether these permissive policies for trade barriers aid developing countries. See, for example, T. Epps and M.J. Trebilcock, 'Special and Diff erential Treatment in Agricultural Trade: Breaking the Impasse' in Chantel Thomas and Joel P. Trachtman (eds), Developing Countries in the WTO Legal System (Oxford: Oxford University Press, 2009).
24. Donald Regan, 'What Are Trade Agreements For? - Two Confl icting Stories Told by Economists, With a Lesson for Lawyers' (2006) 9 (4) Journal of International Economic Law 951. For other discussions of why countries enter into trade agreements, see Kyle Bagwell and Robert Staiger, The Economics of the World Trading System (Cambridge, MA: MIT Press, 2002) and Douglas Irwin, Petros Mavroidis and Alan Sykes, The Genesis of the GATT (Cambridge: Cambridge University Press, 2008).
25. Bagwell and Staiger argue for viewing trade and trade agreements through a terms of trade lens. For example, see Bagwell and Staiger (2002). For the terms of trade story to apply, the country applying the tariff must be a 'large' country in relation to the good such that its tariff policy impacts the world price. However, Bagwell argues that countries may be 'large' for some goods and 'small' for others. K. Bagwell, 'Remedies in the WTO: An Economic Perspective', in Merit E. Janow, Victoria J. Donaldson and Alan Yanovich (eds), The WTO: Governance, Dispute Settlement & Developing Countries (Huntington, NY: Juris Publishing, 2008).
26. See, for example, Warren Schwartz and Alan O. Sykes, 'The Economic Structure of Renegotiation and Dispute Resolution in the World Trade Organization' (2002) 31 Journal of Legal Studies S179. Bagwell and Staiger argue that the terms of trade story can encompass protectionist objectives of governments as the political factors can be captured through the local price of goods: Bagwell and Staiger, supra note 24 and Bagwell, ibid.
27. Paul Krugman and M. Obstfeld, International Economics: Theory and Policy, 7th edn (London: Pearson, 2005).
28. Bagwell, supra note 25. Alternatively, trade agreements could be viewed as allowing countries to maximize the member governments' welfare and, in particular, the welfare of their political offi cials. The terms of the agreements, under this view, should be seen as political bargains to allow political offi cials to gain from seeking favours from concentrated interests: Sykes, supra note 11. A third possibility is that trade agreements could be viewed as allowing countries to credibly commit to their domestic constituencies not to engage in protectionism - that is, as a form of 'tying themselves to the mast' so they cannot be pressured into protecting domestic industries.
29. Michael J. Trebilcock and Robert Howse, The Regulation of International Trade, 3rd edn (London: Routledge, 2005).
30. For a discussion of this trade- off in environmental agreements, see Barrett, supra note 18, and Scott Barrett, Environment and Statecraft: The Strategy of Environmental Treaty- Making (Oxford: Oxford University Press, 2003). In the context of trade agreements, see Henrik Horn and Petros Mavroidis, 'International Trade - Dispute Settlement', in Alan O. Sykes and Alan Guzman (eds), Research Handbook in International Economic Law (Cheltenham, UK and Northampton, MA, USA: Edward Elgar, 2008).
31. See, for example, Horn and Mavroidis, ibid. at 183, and Henrik Horn, Giovanni Maggi and Robert W. Staiger, 'Trade Agreements as Endogenously Incomplete Contracts' (NBER Working Paper 12745, December 2006). See also Sykes, supra note 11.
32. Kaplow and Shavell argue that there can be no consideration of fairness separate from social welfare where social welfare includes preferences of individuals or society over distributional fairness (see, for example, Louis Kaplow and Steven Shavell, Fairness versus Welfare (Cambridge, MA: Harvard University Press, 2002). This argument spawned a large debate over whether effi ciency and fairness were necessarily separate or whether effi ciency in the broadest sense encompasses fairness. For our purposes, it is not necessary to attempt to resolve this debate.
33. For a seminal discussion of the trade- off s inherent in choosing the optimal form of legal requirements, see Louis Kaplow, 'Rules Versus Standards: An Economic Analysis' (1992) 42 (3) Duke Law Journal 557
34. Agus Sari, 'Developing Country Participation: The Kyoto-Marrakech Politics' (Hamburg Institute of International Economics, Discussion Paper 333, 2005)
35. This diff erence may arise under various visions of how a country decides on its policy, whether it is a mere aggregation of the preferences of those related to a particular state (or a subset of those people) or results from a more deliberative process in which the decisions of the state determine its policy. See Sen, supra note 9.
36. Kaplow argues that the optimal form and content of legal commands will depend on relative costs and benefi ts. Louis Kaplow, 'Rules Versus Standards: An
37. Economic Analysis' (1992) 42 (3) Duke Law Journal 557
38. There are approximately 60 agreements, decisions, annexes, and understandings. These cover trade in goods, services, and intellectual property. The full text of the agreements can be found in World Trade Organization, The Legal Texts: The Results of the Uruguay Round of Multilateral Negotiations (Cambridge/ Geneva: Cambridge University Press/World Trade Organization, 1999).
39. The Preamble to the Agreement Establishing the WTO notes the objectives of raising standards of living, ensuring full employment and growing real income and eff ective demand, and expanding the production of and trade in goods and services and to this end states the desire of Members to enter into 'reciprocal and mutually advantageous arrangements directed to the substantial reduction of tariff s and other barriers to trade and to the elimination of discriminatory treatment in international trade relations'
40. Pascal Lamy, Speech to the European Parliament, 29 May 2008, available at: www.wto.org/english/news_e/sppl91_e.htm (date accessed: 15 August 2008).
41. For a full discussion of the relationship between the TBT Agreement and the GATT, see Gabrielle Marceau and Joel Trachtman, 'The Technical Barriers to Trade Agreement, the Sanitary and Phytosanitary Measures Agreement, and the General Agreement on Tariff s and Trade' (2002) 36 (5) Journal of World Trade 811 at 873
42. John H. Jackson, Sovereignty, the WTO, and Changing Fundamentals of International Law (Cambridge: Cambridge University Press, 2006) 135. Jackson notes that some commentators, however, maintain that the International Court of Justice ought to take this title.
43. Article 11 of the Dispute Settlement Understanding requires a panel to
44. The DSB is the WTO General Council - being a body composed of all WTO members - when it convenes to settle disputes arising between members
45. See William J. Davey, 'The Sutherland Report on Dispute Settlement: A Comment' (2005) 8 (2) Journal of International Economic Law 321.
46. Joseph E. Stiglitz and Andrew Charlton, Fair Trade For All: How Trade Can Promote Development (New York: Oxford University Press, 2005) at 88.
47. Elizabeth Acorn, Learning from Experience: Special and Diff erential Treatment in the World Trade Organization (2006) [unpublished, Toronto]. For a succinct description of the history of SDT, see Hunter Nottage, 'Trade and Competition in the WTO: Pondering the Applicability of Special and Diff erential Treatment' (2003) 6 (1) Journal of International Economic Law 23 at 24.
48. The GSP was implemented under the auspices of UNCTAD in 1971: Resolution 21(II) of the Second UNCTAD Conference, in UNCTAD, Proceedings of the Conference of 1968, Report and Annexes (United Nations, TD/97)
49. See for example, Joel Trachtman, 'Legal Aspects of a Poverty Agenda at the WTO: Trade Law and "Global Apartheid"' (2003) 6 (1) Journal of International Economic Law 3
50. Sylvia Ostry, 'The Uruguay Round North-South Grand Bargain: Implications for Future Negotiations' (2000) Political Economy of International Trade Law. See also Joseph E. Stiglitz and Andrew Charlton, Fair Trade for All (New York: Oxford University Press, 2005); and Joseph E. Stiglitz, Globalization and its Discontents (New York: W.W. Norton & Company, 2003).
51. United Nations, General Assembly Resolution A/RES/43/53, 6 December 1988
52. Intergovernmental Panel on Climate Change, www.ipcc.ch/about/index. htm (date accessed: 15 August 2008).
53. J.T. Houghton, G.J. Jenkins and J.J. Ephraums (eds), Scientifi c Assessment of Climate Change - Report of Working Group I (Cambridge: Cambridge University Press, 1990).
54. Ministerial Declaration contained in the report of the Conference in A/45/696/Add.1, Annex III (1990).
55. United Nations General Assembly, A/RES/45/212, 21 December 1990
56. UNFCCC, Article 2
57. Senate resolution 98 (proposed by Byrd- Hagel), adopted July 1997. Other contributing factors to the US refusal to ratify included that they would have to spend more than most other nations to comply with the commitments, despite having relatively little to gain.
58. See Cass R. Sunstein, The Complex Climate Change Incentives of China and the United States (John M. Olin Law & Economics Working Paper No. 352 (2nd series), Public Law and Legal Theory Working Paper No. 176, The Law School, University of Chicago, 2007) 8. See also William Nordhaus, 'The Challenge of Global Warming: Economic Models and Environmental Policy' (2007), available online at: http://nordhaus.econ.yale.edu/dice_mss_072407_all. pdf (date accessed: 22 December 2009).
59. Farhanna Yamin and Joanna Depledge, The International Climate Change Regime - A Guide to Rules, Institutions and Procedures (Cambridge: Cambridge University Press, 2004) 27
60. Developed countries now contribute about half of annual GHG emissions, but have nearly 85% of the world's population. The energy- related carbon footprint of an average citizen of a low- or middle- income country is 1.3 or 4.5 metric tons of carbon dioxide equivalent respectively. This compares with 15.3 in developed countries. Further, the majority of past emissions (and thus the greatest percentage of the existing atmospheric stock of GHGs) is the responsibility of developed countries. World Bank, World Development Report 2010: Development and Climate Change (Washington, DC: The World Bank, 2010) at 44.
61. Pursuant to Article 18, which called upon the Conference of the Parties serving as the Meeting of the Parties to the Kyoto Protocol (CMP) to approve, at its fi rst session, 'procedures and mechanisms' to determine and address cases of non- compliance with the Protocol
62. In decision 24/CP.7 as confi rmed by the CMP in decision 27/CMP.1.
63. Agus Sari, 'Developing Country Participation: The Kyoto-Marrakech Politics' (Hamburg Institute of International Economics, Discussion Paper 333, 2005) 18
64. International Centre for Trade and Sustainable Development, Bridges Copenhagen Update, 21 December 2009, Issue 3
65. See R. Revesz and R. Stavins, 'Environmental Law', in A.M. Polinsky and S. Shavell (eds), The Handbook of Law and Economics vol. 1 (Amsterdam: Elsevier, 2007) arguing that instruments should be assessed based on cost- eff ectiveness, distributional equity and political feasibility. Cost- eff ectiveness includes whether the instrument achieves its goal, whether it does so at the lowest possible cost, whether it provides the relevant information to government and whether it provides adequate dynamic incentives (such as for research and development of new technology).
66. See D. Duff and A. Green, 'Market- Based Policies For Renewable Energy Source Electricity: A Comparative Evaluation', in N. Chalifour, J. Milne, H. Ashiabor, K. Deketelaere and L. Kreiser (eds), Critical Issues in Environmental Taxation: International and Comparative Perspectives, vol. V (Oxford: Oxford University Press, 2008) for a discussion of environmental side- eff ects and other aspects of instrument choice in the context of renewable sources of electricity.
67. For a discussion of instrument choice and norms or values, see C. Sunstein, 'Social Norms and Social Roles' (1996) Columbia Law Review 903, R. McAdams, 'The Origin, Development and Regulation of Norms' (1997) 96 (2) Michigan Law Review 338, and A. Green, 'You Can't Pay Them Enough: Subsidies, Environmental Law and Social Norms' (2006) 30 Harvard Environmental Law Review 407.
68. British Columbia, Backgrounder: Balanced Budget 2008, online at: www. bcbudget.gov.bc.ca/2008/backgrounders/backgrounder_carbon_tax.htm (date accessed: 3 March 2010).
69. For a discussion of the characteristics of carbon taxes and emissions trading schemes, and the advantages and disadvantages of each, see Chapter 6
70. As noted in Chapter 2, a public good is a good that is non- excludible (one party cannot stop others from enjoying the benefi ts of the good) and non- rivalrous (one party's enjoyment of the good does not reduce the amount for others). See Scott Barrett, 'Proposal for a New Climate Change Treaty System' (2007) 4 (3) The Economists' Voice Article 6. Barrett describes reducing concentrations of GHG in the atmosphere as an additive or 'aggregate eff orts' public good as opposed to a 'single best eff orts' public good (such as stopping an asteroid from hitting the earth), which can rely on unilateral action, or a 'weakest link' public good (such as stopping the spread of a disease), which depends on every country being involved.
71. Howard Chang, 'An Economic Analysis of Trade Measures to Protect the Global Environment' (1994-95) 83 Georgetown Law Journal 2131 (discussing 'carrots' and 'sticks' in promoting environmental protection) and Scott Barrett, Environment and Statecraft: The Strategy of Environmental Treaty-Making (Oxford: Oxford University Press, 2003). See also Howard F. Chang, 'Carrots, Sticks, and International Externalities' (1997) 17 International Review of Law and Economics 309.
72. These types of measures overlap with measures that are more specifi cally aimed at reducing environmental harm such as reducing subsidies for environmentally harmful industries or liberalizing trade in environmentally friendly goods and services (such as wind turbines). This chapter only examines these measures to the extent they relate to the objective of increasing participation in or compliance with an international climate change regime.
73. Ludivine Tamiotti et al., Trade and Climate Change: A Report by the United Nations Environment Programme and the World Trade Organization (Geneva: WTO, 2009) at 13.
74. [1] Cass Sunstein, The Laws of Fear (Cambridge: Cambridge University Press, 2005); and Richard Posner, Catastrophe: Risk and Response (Oxford: Oxford University Press, 2004). Information campaigns may also not solve the collective action problem where individuals who may be inclined to respond to the information do not perceive other individuals as responding and therefore are unwilling to act.
75. Alan Sykes, 'Regulatory Protectionism and the Law of International Trade' (1999) 66 University of Chicago Law Review 1, at 3
76. Michael Trebilcock and Shiva Giri, 'The National Treatment Principle in International Trade Law', in Choi and Hartigan (eds), Handbook of International Trade, Volume II (Oxford: Blackwell, 2005)
77. The other principal agreement relating to regulations is the TBT Agreement. As discussed below, it also has a national treatment provision.
78. Michael Trebilcock and Robert Howse, The Regulation of International Trade, 3rd edn. (London: Routledge, 2005).
79. See, for example, Canada - Certain Measures Aff ecting the Automobile Industry (2000) WTO Doc. WT/DS139/R and WT/DS142/R (Panel Report). The issue was not appealed. Canada had exempted imported motor vehicles from a customs duty where the manufacturer's local production of motor vehicles reached a minimum amount of Canadian value added and a certain production to sales ratio in Canada. These conditions were set out in government orders and letters of undertaking to the government but were not deemed by the Canadian government to be legally enforceable. The Panel found these conditions to fi t within the term 'requirements' under Article III.4.
80. The acronym PCG is used to refer collectively to polyvinyl alcohol fi bres ('PVA'), cellulose and glass fi bres
81. Robert Howse and Elizabeth Tuerk, 'The WTO Impact on Internal Regulations - A Case Study of the Canada-EC Asbestos Dispute', in G. de Burca and J. Scott (eds), The EU and the WTO: Legal and Constitutional Issues (Oxford: Hart Publishing, 2001).
82. Korea-Measures Aff ecting Imports of Fresh, Chilled and Frozen Beef (2001) WTO Doc. WT/DS161. WT/DS169/AB/R (Appellate Body Report) at para. 137 (emphasis in original).
83. A. Porges and J. Trachtman, 'Robert Hudec and Domestic Regulation: The Resurrection of Aim and Eff ects' (2003) 37 (4) Journal of World Trade 783.
84. Donald Regan, 'Further Thoughts on the Role of Regulatory Purpose Under Article III of the General Agreement on Tariff s and Trade' (2003) 37 (4) Journal of World Trade 737
85. European Communities - Measures Aff ecting the Approval and Marketing of Biotech Products (2006) WTO Doc. WT/DS291/R, WT/DS292/R and WT/ DS293/R (Panel Report) at para. 7.2505.
86. Robert Hudec, 'GATT/WTO Constraints on National Regulation: Requiem for an "Aim and Eff ects" Test' (1998) 32 International Lawyer 619
87. Mattias Buck and Roda Verheyen, 'International Trade Law and Climate Change - A Positive Way Forward' (FES- Analyse Okologische Marktwirtschaft, Bonn: Friedrich Ebert Stiftung, July 2001)
88. Article 2.4 of the SPS Agreement states that 'sanitary or phytosanitary measures which conform to the relevant provisions of this Agreement shall be presumed to be in accordance with the obligations of the Members under the provisions of GATT 1994 which relate to the use of sanitary and phytosanitary measures, in particular the provisions of Article XX(b).'
89. TBT Agreement, Article 2.1 states, 'Members shall ensure that in respect of technical regulations, products imported from the territory of any Member shall be accorded treatment no less favourable than that accorded to like products of national origin and to like products originating in any other country.'
90. The term 'like' in Article 2.1 has not been interpreted yet so it is not clear how broadly panels or the Appellate Body will read this provision.
91. Robert Howse, 'Democracy, Science and Free Trade: Risk Regulation on Trial at the World Trade Organization' (2000) University of Michigan Law Review 2329
92. Robert Hudec, 'Science and "Post- Discriminatory" WTO Law' (2003) 26 Boston College International and Comparative Law Review 185
93. Kevin L. Doran and Alaine Ginnochio, United States Climate Policy: Using Market- Based Strategies to Achieve Greenhouse Gas Emission Reductions (University of Colorado Law School, 2008) at 3.
94. Joseph E. Aldy, Eduardo Ley and Ian W.H. Parry, A Tax- Based Approach to Slowing Global Climate Change (Washington, DC: Resources for the Future, 2008) at 2.
95. Such taxes fall under the umbrella category of 'environmental taxes', which may be broadly defi ned as encompassing compulsory payments to governments on tax bases that are deemed to be of particular environmental relevance. Organisation for Economic Co- operation and Development (OECD), Environmentally Related Taxes in OECD Countries: Issues and Strategies (Paris: OECD, 2001) at 15.
96. Zhong Xiang Zhang and Andrea Baranzini, 'What do we Know about Carbon Taxes? An Inquiry into their Impacts on Competitiveness and Distribution of Income' (2004) 32 Energy Policy 507 at 508. See also David G. Duff, Tax Policy and Global Warming (University of Toronto, Faculty of Law, Public Law and Legal Theory Research Paper No. 03-03 and Law and Economics Research Paper No. 03-04, 2003) at 34. Duff fi nds that often the distinctions between energy and carbon taxes are blurred by the fact that many countries tax both energy and carbon, by the availability of energy tax exemptions and rebates for energy from clean and renewable sources, and by the existence of reductions or rebates for energy- intensive industries.
97. A carbon tax can be translated into a CO2 tax, as a tonne of carbon corresponds to 3.67 tonnes of CO2. Zhang and Baranzini, ibid. See also Kevin L. Doran and Alaine Ginnochio, United States Climate Policy: Using Market- Based Strategies to Achieve Greenhouse Gas Emission Reductions (University of Colorado Law School, 2008) at 5.
98. Gilbert Metcalf and David Weisbach, The Design of a Carbon Tax (John M. Olin Law and Economics Working Paper No. 447 (2nd series), Public Law and Legal Theory Working Paper No. 254, The Law School, The University of Chicago, 2009) at 9.
99. These are the GHGs in respect of which Annex I Parties to the Kyoto Protocol are expected to eff ect reductions in emissions and which are included in the UNFCCC's reporting guidelines. Taxes could also potentially be used to target indirect GHGs, including carbon monoxide (CO), nitrogen oxides (NOx), non- methane volatile organic compounds (NMVOCs), and sulphur oxides (SOx). Climate Change Secretariat, United Nations Framework Convention on Climate Change: Handbook (Bonn, Germany: United Nations Framework Convention on Climate Change, 2006) at 184.
100. Reuven S. Avi-Yonah and David M. Uhlmann, Combating Global Climate Change: Why a Carbon Tax is a Better Response to Global Warming than Cap and Trade (Ann Arbor: University of Michigan Law School, Public Law and Legal Theory Working Paper Series, 2008) at 32.
101. Kevin L. Doran and Alaine Ginnochio, United States Climate Policy: Using Market- Based Strategies to Achieve Greenhouse Gas Emission Reductions (University of Colorado Law School, 2008) at 6.
102. Simonetta Zarrilli, 'Domestic Taxation of Energy Products and Multilateral Trade Rules: Is This a Case of Unlawful Discrimination?' (2003) 37 (2) Journal of World Trade 359 at 365. Citing IEA, 'An Overview of Green Tax Reform and Environmentally Related Taxes in OECD Countries' (IAE, First Quarter 2002).
103. T. Tietenberg, 'Can Eco- taxation be Eff ective in Reducing Carbon Emissions?' Online at: www.colby.edu/personal/t/thtieten/eco-taxation.htm (date accessed: 6 November 2009).
104. Finance Act 2000, section 30 and Schedules 6 and 7
105. Government of British Columbia, Balanced Budget 2008, Backgrounder: BC's Revenue- Neutral Carbon Tax (Victoria, 2008). Available online at: http:// www.bcbudget.gov.bc.ca/2008/backgrounders/backgrounder_carbon_tax.htm (date accessed: 6 November 2009).
106. British Columbia Ministry of Finance, Budget and Fiscal Plan 2008/09-2010/11 (19 February 2008), available at: http://www.bcbudget.gov.bc.ca/2008/ bfp/2008_Budget_Fiscal_Plan.pdf (date accessed: 16 June 2008), at p. 12.
107. Regulation Respecting the Annual Duty Payable to the Green Fund, R.Q. c. R- 6.01, available online at: http://canlii.org/qc/laws/sta/r- 6.01/20080515/whole. html (date accessed: 16 June 2008).
108. Japan - Taxes on Alcoholic Beverages (1996) WTO Doc. WT/DS8/AB/R, WT/ DS10/AB/R, WT/DS11/AB/R (Appellate Body Report) section H(2)(b) at p. 28.
109. For general information on algae biofuel, see John Sheehan et al., A Look Back at the U.S. Department of Energy's Aquatic Species Program: Biodiesel from Algae, Close- Out Report (Golden, CO: National Renewable Energy Laboratory, 1998).
110. Raj Bhala, Modern GATT Law: A Treatise on the General Agreement on Tariff s and Trade (London: Sweet & Maxwell, 2005) at 119
111. Jatropha is a tree native to Central America that is considered to be a promising candidate for biodiesel production. This hypothetical is based on the assumption that biofuel based on jatropha does not have a high carbon dioxide emissions profi le. This assumption is made purely for the purposes of the hypothetical.
112. Alan O. Sykes, 'The Economics of WTO Rules on Subsidies and Countervailing Measures', in A. Appleton, P. Macrory and M. Plummer (eds), The World Trade Organization: Legal, Economic and Political Analysis, vol. II (New York: Springer Verlag, 2005).
113. Kym Anderson and Warwick McKibbon, 'Reducing Coal Subsidies and Trade Barriers: Their Contribution to Greenhouse Gas Abatement' (2000) 5 Environment and Development Economics 457, and Anthony Owen, 'Environmental Externalities, Market Distortions and the Economics of Renewable Energy Technologies' (2004) 25 (3) The Energy Journal 127
114. Owen, supra note 2, and A. Green and D. Duff, 'Market- Based Policies for Renewable Energy: A Comparative Evaluation', in N. Chalifour, J. Milne, H. Ashiabor, K. Deketelaere and L. Kreiser (eds), Critical Issues in Environmental Taxation: International and Comparative Perspectives, vol. V (Oxford: Oxford University Press, 2008).
115. The literature on law and social norms and values is voluminous. For discussions of how norms or values are created, internalized and enforced, see for example C. Sunstein, 'Social Norms and Social Roles' (1996) Columbia Law Review 903 at 905, 918 and 958-9; R.
116. McAdams, 'The Origin, Development and Regulation of Norms' (1997) 96 (2) Michigan Law Review 338 at 353-4
117. A. Sen, Rationality and Freedom (Cambridge, MA: Harvard University Press, 2002); Richard McAdams and Eric Rasmusen, 'Norms in Law and Economics' in A. Mitchell Polinsky and Steven Shavell (eds), Handbook of Law and Economics (Amsterdam: Elsevier Science, 2007) and A. Green, 'You Can't Pay Them Enough: Subsidies, Environmental Law and Social Norms' (2006) 30 Harvard Environmental Law Review 407. Alan Sykes, 'Regulatory Protectionism and the Law of International Trade' (1999) 66 University of Chicago Law Review 1, at 3.
118. United States - Tax Treatment for 'Foreign Sales Corporations', (2002) WTO Doc. WT/DS108/AB/R (Appellate Body Report).
119. Economist Joseph Stiglitz has argued that lack of climate change regulation could be an actionable subsidy (see J. Stiglitz, 'A New Agenda for Global Warming' (2006) 7 (3) The Economists' Voice (available at: http://www.bepress. com/ev/vol3/iss7/art3). However, such a lack of regulation probably does not satisfy the defi nition of a subsidy under the SCM Agreement (J. Bhagwati and P. Mavroidis, 'Is Action Against US Exports for Failure to Sign the Kyoto Protocol WTO- legal?' (2007) 6 (2) World Trade Review 299).
120. Canada - Measures Aff ecting the Export of Civilian Aircraft (1999) WTO Doc. WT/DS70/AB/R (Appellate Body Report). The benefi t must be examined with reference to the prevailing market conditions in the subsidizing country and not the exporting country (United States - Preliminary Determinations with Respect to Certain Softwood Lumber from Canada (2002) WTO Doc. WT/DS222/R (Panel Report).
121. R. Howse, 'Subsidies to Address Climate Change: Legal Issues' (Winnipeg, Canada: International Institute for Sustainable Development, 2009).
122. A. Sykes, 'The Questionable Case for Subsidies Regulation: A Comparative Perspective' (Stanford University School of Law, Law and Economics Research Paper Series, No. 380, 2009).
123. N. Chalifour, 'Encouraging the Transition to Sustainable Forestry in Canada with Ecological Fiscal Reform - Potential and Pitfalls' (2004) 14 Journal of Environmental Law and Practice 254.
124. SCM Agreement, Article 3
125. K. Bagwell, 'Remedies in the WTO: An Economic Perspective', in Merit E. Janow, Victoria J. Donaldson and Alan Yanovich (eds), The WTO: Governance, Dispute Settlement & Developing Countries (Huntington, NY: Juris Publishing, 2008).
126. C. Forcese, 'The Kyoto Rift: Trade Law Implications of Canada's Kyoto Implementation Strategy in an Era of Canadian-US Environmental Divergence', in Kevin Kennedy (ed.), The First Decade of NAFTA; The Future of Free Trade in North America (Ardsley, NY: Transnational Publishers, 2004).
127. In Australia, for example, climate change legislation was rejected in the Senate after the opposition Liberal- National coalition spoke out about the impact of the bill on trade- exposed industries and the agricultural and mining sectors: 'Climate Defeat', The Economist, 14 August 2009
128. John Stephenson and Simon Upton, Competitiveness, Leakage, and Border Adjustment: Climate Policy Distractions? (Paris: Organisation for Economic Cooperation and Development (OECD), Round Table on Sustainable Development SG/SD/RT(2009)3, 2009) at 11
129. International Centre for Trade and Sustainable Development (ICTSD), Trade and Climate Change Briefi ng, Issue 3, Border Carbon Adjustment, UNFCCC COP 15, Copenhagen 2009, 5 December 2009
130. See for example Angel Gurría, 'Carbon has no Place in Global Trade Rules', Financial Times, 4 November 2009 (reporting on a statement by the Secretary General of the OECD). See also Jagdish Bhagwati and Petros C. Mavroidis, 'Is Action against US Exports for Failure to Ratify Kyoto Protocol WTO- legal?' (2007) 6 (2) World Trade Review 299.
131. Organisation for Economic Co- operation and Development (OECD), The Political Economy of Environmentally Related Taxes (Paris: OECD, 2006) at 91
132. According to the OECD, international competitiveness concerns have been responsible for the scrapping of proposals to introduce the 1993 BTU Tax legislation in the US (a tax on each unit of energy consumed, measured in BTUs, or British Thermal Units), the 'Greenhouse Levy' in Australia in 1994, and the EU Council's Directive to establish a common EU framework on energy taxation in 2003. They were also at issue in the EU debate over its emissions trading scheme, which eventually included concessions to reduce adverse impacts on energyintensive and trade- exposed industries. OECD, Linkages Between Environmental Policy and Competitiveness (Paris: Organisation for Economic Co- operation and Development ENV/EPOC/GSP(2008)14/FINAL,OECD, 2009).
133. Harry Johnson and Mel Krauss, 'Border Taxes, Border Tax Adjustments, Comparative Advantage, and the Balance of Payments' (1970) 3 (4) The Canadian Journal of Economics 595 at 596
134. Michael Keen and Sajal Lahiri, 'The Comparison between Destination and Origin Principles under Imperfect Competition' (1998) 45 Journal of International Economics 323 at 324. See also Gene M. Grossman, 'Border Tax Adjustments: Do they Distort Trade?' (1980) 10 Journal of International Economics 117 at 127.
135. GATT, GATT Working Party on Border Tax Adjustments, BSID 18S/97, GATT, 1970 (emphasis added)
136. Although, as noted above, it may interpret the meaning of 'like' more broadly, given that there is no equivalent to Article III.2's second sentence.
137. United States - Taxes on Petroleum and Certain Imported Substances ('Superfund'), BSID 34S/136/154, 1987
138. Zhong Xiang Zhang and Lucas Assunção, 'Domestic Climate Policies and the WTO' (2003) 27 (3) The World Economy 359
139. Joost Pauwelyn, US Federal Climate Policy and Competitiveness Concerns: The Limits and Options of International Trade Law (Nicholas Institute for Environmental Policy Solutions, Duke University, 2007)
140. Pursuant to the Omnibus Budget Reconciliation Act of 1989
141. Duncan Brack, International Trade and Climate Change Policies (London: Earthscan, 2000)
142. J.A. Hoerner and F. Muller, 'Compatibility of Off sets with International Trade Rules', in E. Staehelin- Witt and H. Blöchliger (eds), Okologish orientierte Steuerreformen: Die fi skal- und außenwirtschaftspolitishen Aspekte (Bern: Haupt 1997) 235.
143. This language did not exist in the 1979 Code on Subsidies and Countervailing Measures (Subsidies Code). The Subsidies Code prohibited the adjustment of prior- stage cumulative indirect taxes unless levied on products physically incorporated into the product.
144. Letter written by USCIB President Abraham Katz to the Clinton administration seeking clarifi cation regarding the permissibility of BTAs on exports vis- à- vis inputs
145. C. Pitschas, 'GATT/WTO Rules for Border Tax Adjustment and the Proposed European Directive Introducing a Tax on Carbon Dioxide Emissions and Energy' (1995) 24 (3) Georgia Journal of International and Comparative Law 479.
146. Roland Ismer and Karsten Neuhoff, 'Border Tax Adjustment: a Feasible Way to Support Stringent emission trading' (2007) 24 European Journal of Law and Economics 137
147. The Wall Street Journal, Environmental Capital, 'Cap and Trade: Will the Senate Go for Carbon Tariff s, Too?' 1 October 2009
148. United States - Standards for Reformulated and Conventional Gasoline (US - Reformulated Gasoline) (1996) WTO Doc. WT/DS2/AB/R (Appellate Body Report) at p. 22.
149. Korea - Measures Aff ecting Imports of Fresh, Chilled and Frozen Beef (2001) WTO Doc. WT/DS161. WT/DS169/AB/R (Appellate Body Report). These statements were made by the Appellate Body in the context of Article XX(d) but in general have been applied to Article XX(b). Article XX(d) allows countries to take measures that are 'necessary to secure compliance with laws or regulations that are not inconsistent with the provisions of this Agreement'.
150. A. Sykes, 'The Least Restrictive Means' (2003) 70 (1) University of Chicago Law Review 403.
151. United States - Import Prohibition of Certain Shrimp and Shrimp Products (US - Shrimp I) (1998) WTO Doc. WT/DS58/AB/R (Appellate Body Report) at para. 129ff.
152. For example, the ineff ectiveness of a particular policy (controls on emissions of new cars) was argued (unsuccessfully) as part of a challenge to the US Environmental Protection Agency's failure to regulate GHG emissions from new cars under the Clean Air Act: Massachusetts v. EPA, 127 S.Ct. 1438 (2007).
153. See Robert Howse, 'Subsidies to Address Climate Change: Legal Issues' (International Institute for Sustainable Development, August 2009) (arguing that the Appellate Body has signalled it will be relatively deferential to climate change measures)
154. Andrew Guzman, 'Food Fears: Health and Safety at the WTO' (2005) 45 Virginia Journal of International Law 1 (arguing that panels and the Appellate Body are not likely to be as good at identifying the preferences of the citizens of a state as the domestic government)
155. World Bank, World Development Report 2010: Development and Climate Change (Washington, DC: The World Bank, 2010) at 255
156. See Chapter 2 for a discussion of rules and standards. A key framework for this distinction is found in Louis Kaplow, 'Rules Versus Standards: An Economic Analysis' (1992) 42 (3) Duke Law Journal 557.
157. The remedial provisions for export subsidies are somewhat stricter both in the actual remedies and the timelines; see Andrew Green and Michael Trebilcock, 'Enforcing WTO Obligations: What Can We Learn From Export Subsidies?' (2007) 10 (3) Journal of International Economic Law 653
158. There is a debate in the literature about the nature of WTO sanctions. They may be viewed as a form of liability rule - that is, a rule that allows the responding (violating) party to determine whether the harm it is causing is greater or less than the benefi ts it receives. Such a view would allow for effi cient breach (non- compliance with the WTO rules where it is effi cient). The alternative is that there would be a very high penalty for non- compliance with WTO rules, indicating that there is a strict prohibition on non- compliance. The nature of WTO remedies (including their prospective nature) appears to point towards the sanctions being a form of liability rule. See, for example, Warren Schwartz and Alan O. Sykes, 'The Economic Structure of Renegotiation and Dispute Resolution in the World Trade Organization' (2002) 31 Journal of Legal Studies S179; Joel Trachtman, 'The WTO Cathedral' (2007) 43 (1) Stanford Journal of International Law 127. But see John H. Jackson, 'International Law Status of WTO Dispute Settlement Reports: Obligations to Comply or Option to "Buy Out"?' (2004) 98 (1) American Journal of International Law 109, and Joost Pauwelyn, 'Optional Protection of International Law: Navigating Between "European Absolutism" and "American Voluntarism"' (University of St Gallen Law and Economics Working Paper, No. 27, 2007).
159. Schwartz and Sykes, ibid., argue that the prospective nature of remedies
160. See, for example, Green and Trebilcock, supra note 3, discussing how the prospective nature of WTO remedies allows countries to use one- time export subsidies to gain control of a market without facing direct countermeasures, and A. Green, 'Carbon Pricing, the WTO and the Canadian Constitution', in Thomas J. Courchene and John R. Allan (eds), Canada: The State of the Federation 2009, Carbon Pricing and Environmental Federalism (Montreal and Kingston: Institute of Intergovernmental Relations, McGill- Queen's University Press, 2010).
161. EC - Measures Concerning Meat and Meat Products (Hormones) (1998) WTO Doc. WT/DS26/AB/R, WT/DS/48/AB/R.
162. Canada - Continued Suspension of Obligations in the EC - Hormones Dispute (2008) WTO Doc. WT/DS321/AB/R.
163. Andrew Guzman and Beth Simmons, 'To Settle or Empanel? An Empirical Analysis of Litigation and Settlement at the World Trade Organization' (2002) 31 Journal of Legal Studies S205. Guzman and Simmons describe disputes as 'lumpy' where they do not admit of a continuous form of solution (such as removing a ban on imports of a harmful substance) and fi nd some empirical evidence that 'lumpy' cases are less likely to settle than 'continuous' cases (such as lowering of a tariff level), at least where the dispute involves a pair of democratic countries.
164. P. Krugman and M. Obstfeld, International Economics: Theory and Policy, 7th edn (London: Pearson, 2005) (discussing loss of welfare from tariff s, particularly if the country is small in the sense of not being able to aff ect the world price of the good).
165. See, for example, Joel P. Trachtman, 'The WTO Cathedral' (2077) 43 (1) Stanford Journal of International Law 127. But see Andrew Guzman and Beth Simmons, 'Power Plays and Capacity Constraints: The Selection of Defendants in WTO Disputes' (2005) 34 Journal of Legal Studies 557 (arguing that reputation or fear of retaliation is as important to origin of WTO challenges as the lack of resources for developing countries).
166. Scott Barrett, Why Cooperate? The Incentive to Supply Global Public Goods (Oxford: Oxford University Press, 2007)
167. For discussions of the diffi culties of developing countries using the dispute settlement system, see, for example, Chad P. Bown and Bernard M Hoekman, 'Developing Countries and Enforcement of Trade Agreements: Why Dispute Settlement is Not Enough' (2008) 42 (1) Journal of World Trade 177; Guzman and Simmons, supra note 12, and Chad Bown, Self- Enforcing Trade: Developing Countries and WTO Dispute Settlement (Washington, DC: Brookings Institution Press, 2009).
168. See, for example, Andrew Guzman, 'Dispute Resolution in SPS Cases', in D. Horovitz, D. Moulis and D. Steger (eds), Ten Years of WTO Dispute Settlement (London: International Bar Association, 2007)
169. Andrew Guzman, 'Determining the Appropriate Standard of Review in WTO Disputes' (2009) 42 (1) Cornell Journal of International Law
170. Robert Howse, 'Democracy, Science and Free Trade: Risk Regulation on Trial at the World Trade Organization' (2000) 98 Michigan Law Review 2329; and Alan O. Sykes, 'Domestic Regulation, Sovereignty and Scientifi c Evidentiary Requirements: A Pessimistic View' (2002) 3 (2) Chicago Journal of International Law 353.
171. For an overview of these requirements under the SPS Agreement, see Tracey Epps, International Trade and Health Protection: A Critical Analysis of the WTO's SPS Agreement (Cheltenham, UK and Northampton, MA, USA: Edward Elgar, 2008). See also Howard Chang, 'Risk Regulation, Endogenous Public Concerns, and the Hormones Dispute: Nothing to Fear but Fear Itself?', (2004) 77 Southern California Law Review 743, and A. Guzman, 'Food Fears: Health and Safety at the WTO' (2005) 45 Virginia Journal of International Law.
172. Guzman and Simmons, supra note 12 (arguing that panels and the Appellate Body are not likely to be as good at identifying the preferences of the citizens of a state as the domestic government and arguing for the benefi ts of procedural review and not substantive review under the SPS Agreement), and A. Green, 'Regulations and Rule- Making: The Dilemma of Delegation', in Colleen Flood and Lorne Sossin (eds), Administrative Law in Context (Toronto: Emond Montgomery, 2008) (discussing the benefi ts of such procedural requirements in the domestic context).
173. A. Green, 'Creating Environmentalists: Environmental Law, Identity and Commitment' (2006) 17 Journal of Environmental Law and Practice 1.
174. Stephenson, for example, develops a model in which courts can use the quality (as opposed to the informational content) of agency explanations of their regulatory decisions as a signal of the level of benefi ts from the decisions. The model requires that agency and court preferences are somewhat aligned and that when the court cannot evaluate substantively the agency's reasons, the quality of the reasons given provides evidence that the agency views the measure as of high value. Matthew Stephenson, 'A Costly Signaling Theory of "Hard Look" Judicial Review' (2006) 58 Administrative Law Review 753.
175. Ethan Bueno de Mesquita and Matthew Stephenson, 'Regulatory Quality Under Imperfect Oversight' (2007) 101 (3) American Political Science Review 605 (examining the impact of domestic oversight on the quality of regulatory decisionmaking where the overseer can observe some forms of eff ort but not others). For more general discussions of the use of decision- costs to control agency behaviour, see Matthew McCubbins, Roger G. Noll and Barry Weingast, 'Administrative Procedures as Instruments of Political Control' (1987) 3 (2) Journal of Law, Economics and Organization 243, and Matthew Stephenson, 'Bureaucratic Decision Costs and Endogenous Agency' (John M. Olin Center for Law, Economics and Business, Harvard University, Discussion Paper No. 553, 2006).
176. See Chang, supra note 17, and Cass Sunstein, The Law of Fear (Cambridge: Cambridge University Press, 2005) discussing the underlying rationality issues as well as public fear
177. See Guzman and Simmons, supra note 12 (arguing against any substantive review of risk assessments under the SPS Agreement in part because of the error costs from mistakes by panels or the Appellate Body)
178. There is a large and growing literature examining whether justices vote in particular cases in line with their own personal policy preferences (for example, for discussion of these models in the US context, see J. Segal and H. Spaeth, The Supreme Court and the Attitudinal Model Revisited (Cambridge: Cambridge University Press, 2002)).
179. Robert F. Housman and Durwood J. Zaelke, 'Making Trade and Environmental Policies Mutually Reinforcing: Forging Competitive Sustainability' (1993) 23 Environmental Law 545 at 561.
180. For further analysis of WTO rules, see Andrew Green and Tracey Epps, 'The WTO, Science and the Environment: Moving Towards Consistency' (2007)
181. [2(] Journal of International Economic Law 285-316; Joost Pauwelyn, 'US Federal Climate Policy and Competitiveness Concerns: The Limits and Options of International Trade Law' (prepared by the Nicholas Institute for Environmental Policy Solutions, Duke University, 2007); and Thomas L. Brewer, 'The WTO and the Kyoto Protocol: Interaction Issues' (2004) 4 Climate Change 3-12.
182. David Dodwell, 'Environment Better Served by Free- trade Carrot than Protectionist Stick', Financial Times (13 May 1992) 4
183. GATT Secretariat, Trade and the Environment (Geneva: International Trade, vol. 1, General Agreement on Tariff s and Trade, 1990).
184. Robert Hudec, Developing Countries in the GATT Legal System (London: Gower, 1987) at 151. As noted above, trade benefi ts might not accrue from use of carrots. There are also downsides to the use of preferential trading arrangements, including supply- side constraints such as lack of physical infrastructure, education, well- functioning fi nancial markets and modern technologies, which mean that a number of developing countries simply do not have the ability to take advantage of market openings, even where they exist.
185. Charnovitz uses the term 'trade conditionality'. Steve Charnovitz, 'The Environmental vs. Trade Rules: Defogging the Debate' (1993) 23 Environmental Law 475 at 492.
186. Resolution 21(II) of the Second UNCTAD Conference, in UNCTAD, Proceedings of the Conference of 1968, Report and Annexes (United Nations, TD/97). Bartels notes that the term 'generalized' probably refl ects an early view that there should be a common scheme adopted by all major developed countries. However, he fi nds that the term 'generalized' in relation to preferences should be treated as legally redundant. Lorand Bartels, 'The WTO Enabling Clause and Positive Conditionality in the European Community's GSP Program' (2003) 6 (2) Journal of International Economic Law 507 at 523.
187. China is listed as a benefi ciary under the EU GSP Scheme, but not under the US Scheme. US Generalized System of Preferences Guidebook, available at the Offi ce of the US Trade Representative, online: http://www.ustr.gov/assets/ Trade_Development/Preference_Programs/GSP/asset_upload_fi le666_8359.pdf and Council Regulation (EC) No. 732/2008 of 22 July 2008, Offi cial Journal of the European Union, 6 August 2008.
188. Michael McKenzie, 'Climate Change and the Generalized System of Preferences' (2008) 11 (3) Journal of International Economic Law 679 at 688
189. Council Regulation (EC) No. 732/2008 of 22 July 2008, Offi cial Journal of the European Union, 6 August 2008 at Article 8.
190. India referred to this problem in the context of the EC's GSP program, arguing that 'the special incentives were discriminatory with respect to countries unable to follow the standards, and which were consequently unable to benefi t from the supplementary benefi ts'. Cited in Robert Howse, 'India's WTO Challenge to Drug Enforcement Conditions in the European Community Generalized System of Preferences: A Little Known Case with Major Repercussions for "Political" Conditionality in US Trade Policy' (2003) 4 (2) Chicago Journal of International Law 385 at 525.
191. UNFCCC, Conference of the Parties, Fifteenth Session, Copenhagen, 7-18 December 2009, Draft Decision - /CP.15, Copenhagen Accord, FCCC/ CP/2009/L.7, 18 December 2009.
192. World Bank, World Development Report 2010: Development and Climate Change (Washington, DC: The World Bank, 2010) at 37. See also Michael McKenzie, 'Climate Change and the Generalized System of Preferences' (2008) 11 (3) Journal of International Economic Law 679 at 691. McKenzie notes the IPCC's fi nding that climate change may slow the pace of progress toward sustainable development and impede achievement of the UN Millennium Development Goals (including eradicating extreme poverty and ensuring environmental sustainability). If, he argues, climate change is an impediment to meeting the development needs identifi ed by the UN, it follows that responding to climate change will help address those needs. Further, the UN Millennium Goals serve as an appropriate 'objective standard' as required by the Appellate Body. Second, he argues that responding to climate change is itself a development need given that climate change poses a signifi cant threat to development. He suggests that the UNFCCC could serve as the required objective standard to establish the existence of the need, referring to its goal of achieving stabilization of GHG concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system, and its statement that such levels should be met within a time frame suffi cient to 'enable economic development to proceed in a sustainable manner'.
193. As Gordon argues, if wealthy nations decide not to take action, poorer nations will suff er with absolutely no recourse within the international system. Ruth Gordon, 'Climate Change and the Poorest Nations: Further Refl ections on Global Inequality' (2007) 78 University of Colorado Law Review 1559 at 1564.
194. Human Development Report 2007/2008, 'Fighting Climate Change: Human Solidarity in a Divided World' (New York: United Nations Development Program, 2007) at 69
195. The EC wanted to protect its own citizens from drugs, not to further the benefi ciary countries' development needs. Robert Howse, 'India's WTO Challenge to Drug Enforcement Conditions in the European Community Generalized System of Preferences: A Little Known Case with Major Repercussions for "Political" Conditionality in US Trade Policy' (2003) 4 (2) Chicago Journal of International Law 385 at 401. Citing First Written Submission of the European Communities in EC - Tariff Preferences, supra note 13 para 166.
196. See discussion of positive incentives in Robert N. Stavins and Scott Barrett, 'Increasing Participation and Compliance in International Climate Change Agreements' (Fondazione Eni Enrico Mattei Working Paper No. 94.2002; Kennedy School of Government Working Paper No. RWP02-031, 2002) at 17.
197. See Robert Hudec, Developing Countries in the GATT Legal System (London: Gower, 1997)
198. The Danish Institute for International Studies and the Food and Resource Economics Institute, Special and Diff erential Treatment and Diff erentiation between Developing Countries in the WTO (Copenhagen and Frederiksberg: The Danish Institute for International Studies and the Food and Resource Economics Institute, 2005) at 6
199. Cass Sunstein, 'The Complex Climate Change Incentives of China and the United States' (John M. Olin Law & Economics Working Paper No. 352, The Law School, University of Chicago, 2007).
200. Howard Chang, 'An Economic Analysis of Trade Measures to Protect the Global Environment' (1995) 83 Georgetown Law Journal 2131. Howard F. Chang, 'Carrots, Sticks, and International Externalities' (1997) 17 International Review of Law and Economics 309. He fi nds this perverse incentive particularly likely in multilateral agreements.
201. David Weisbach, Responsibility for Climate Change, by the Numbers (John M. Olin Law & Economics Working Paper No. 448 (2nd Series), Public Law and Legal Theory Working Paper No. 255, 2009) at 25.
202. See generally Raymond Clémençon, 'The Bali Road Map: A First Step on the Diffi cult Journey to a Post- Kyoto Protocol Agreement' (2008) 17 The Journal of Environmental & Development 70. The preamble to the Bali Action Plan states that the Conference of the Parties will 'launch a comprehensive process to enable the full, eff ective and sustained implementation of the Convention through long- term cooperative action by addressing', inter alia, 'nationally appropriate mitigation actions by developing country Parties in the context of sustainable development, supported and enabled by technology, fi nancing and capacity- building, in a measurable, reportable and verifi able manner.' Regarding the CDM, see Antoine Dechezleprêtre, Matthieu Glachant and Yann Ménière, 'The Clean Development Mechanism and the International Diff usion of Technologies: An Empirical Study' (Fondazione Eni Enrico Mattei Note de Lavoro Series Index: http://www.feem.it/ Feem/Pub/Publications/WPapers/default.htm (date accessed: 3 March 2010)).
203. Sunstein calls this a 'plausible if rough projection' of the benefi ts and costs. Cass R. Sunstein, 'Montreal vs. Kyoto: A Tale of Two Protocols' (2007) 31 Harvard Environmental Law Review 1 at 34.
204. Richard B. Stewart and Jonathon B. Wiener, Reconstructing Climate Policy: Beyond Kyoto (Washington, DC: The AEI Press, 2003) at 41.
205. Cass R. Sunstein, The Complex Climate Change Incentives of China and the United States (John M. Olin Law & Economics Working Paper No. 352 (2nd series), Public Law and Legal Theory Working Paper No. 176, The Law School, University of Chicago, 2007) at 12. Citing Olivier Deschenes and Michael Greenstone, 'The Economic Impacts of Climate Change: Evidence from Agricultural Output and Random Fluctuations of Weather' (2006), available at: www.aei- brookings.org/publications/abstract.php?pid=1031.
206. Stewart and Wiener, supra note 4 at 52. Although it should be noted that some of the more extreme projections of harm would see many major US coastal cities and nearly all of Florida being fl ooded. See, for example, James Hansen, The Threat to the Planet (2006) 53 (1) New York Review of Books 4-5.
207. Michael P. Vandenbergh, Climate Change: The China Problem (Vanderbilt University Law School: Public Law & Legal Theory Working Paper No. 08-09; Law & Economics Working Paper No. 08-15, 2008) at 18.
208. Stewart and Wiener, supra note 4 at 42. Russia's agricultural sector is also projected to benefi t from climate change; India, on the other hand, is expected to suff er large losses both in terms of health and agriculture. Eric A. Posner and Cass R. Sunstein, Climate Change Justice (University of Chicago, John M. Olin Law & Economics Working Paper No. 354 (2nd series), 2007) at 13.
209. Vandenbergh, supra note 7 at 14. Vandenbergh also highlights (at 14-15) incentives operating in the opposite direction, including some projections that China would suff er harm including fl ooding of coastal areas if sea levels were to rise 5 metres, as well as the economic harm that would follow if, due to climate change, trading partners were to reduce demand for Chinese goods.
210. Gordon writes for example that many African nations view climate change as a distant problem that does not aff ect them directly, at least in the short term, and view mitigation eff orts as another mandate from the West that will further dampen their development eff orts. Ruth Gordon, 'Climate Change and the Poorest Nations: Further Refl ections on Global Inequality' (2007) 78 University of Colorado Law Review 1559 at 1603.
211. Citing Anil Agarwal, 'A Southern Perspective on Curbing Global Climate Change', in Stephen H. Schneider et al., Climate Change Policy: A Survey (New York: Cambridge University Press, 2002) at 375, 388-90.
212. See, for example, Liu Jiang, Vice- Chairman, National Development and Reform Commission of China, Keynote Speech on the Round Table Meeting of Energy and Environment Ministers from Twenty Nations (2005). Cited in Eric A. Posner and Cass R. Sunstein, Climate Change Justice (University of Chicago, John M. Olin Law & Economics Working Paper No. 354 (2nd series), 2007) at 33.
213. Ruth Gordon, 'Climate Change and the Poorest Nations: Further Refl ections on Global Inequality' (2007) 78 University of Colorado Law Review 1559 at 1601. Citing Anil Agarwal et al. (eds), Green Politics: Global Environmental Negotiations (New Delhi: Centre for Science and the Environment, 1999).
214. Paul Harris, 'The European Union and Environmental Change: Sharing the Burdens of Global Warming' (2006) 17 (2) Colorado Journal of International Environmental Law and Policy 309 at 351
215. The Pew Center on Global Climate Change reports that 'industrialized countries have been historically responsible [for climate change] since they as a group have some of the highest per capita energy use and also have benefi tted from emitting vast quantities of greenhouse gases over the last century.' Eileen Claussen and Lisa McNeilly, 'Equity and Global Climate Change - The Complex Elements of Global Fairness' (Arlington, VA: Pew Center on Global Climate Change, 29 October 1998). See also the United Nations Environment Programme, which states that 'historically the developed countries of the world have emitted most of the anthropogenic greenhouse gases'. United Nations Environment Programme, 'Vital Climate Change Graphics' (UNEP, 2005).
216. CAIT was developed by the World Resources Institute, an environmental think tank. It draws data from various sources, including the carbon inventories required for developed countries under the UNFCCC, the International Energy Agency and the Energy Information Administration, and the Carbon Dioxide Information Analysis Center. See www.cait.wri.org.
217. David Weisbach, Responsibility for Climate Change, by the Numbers (John M. Olin Law & Economics Working Paper No. 448 (2nd Series), Public Law and Legal Theory Working Paper No. 255, 2009) at 10 and 13.
218. Ellen Wiegandt, 'Climate Change, Equity, and International Negotiations', in Urs Luterbacher and Detlef F. Sprinz (eds), International Relations and Global Climate Change (2001). Cited in Paul Harris, 'The European Union and Environmental Change: Sharing the Burdens of Global Warming' (2006) 17 (2) Colorado Journal of International Environmental Law and Policy 309 at 352.
219. On problems with, and potential reforms to, the CDM, see Michael W. Wara, 'Measuring the Clean Development Mechanism's Performance and Potential' (available online at http://ssrn.com/abstract=1086242).
220. International Centre for Trade and Sustainable Development (ICTSD), Trade and Climate Change Briefi ng, Issue 2, Climate Change Financing, UNFCCC COP 15, Copenhagen 2009, 5 December 2009
221. For a survey of competitiveness issues, see Aaron Cosbey and Richard Tarasofsky, Climate Change, Competitiveness and Trade (A Chatham House Report, London: The Royal Institute of International Aff airs, 2007); Joost Pauwelyn, US Federal Climate Policy and Competitiveness Concerns: The Limits and Options of International Trade Law (Nicholas Institute for Environmental Policy Solutions, Duke University, 2007) at 2
222. See Robert N. Stavins and Scott Barrett, Increasing Participation and Compliance in International Trade Agreements (Working Paper No. RWP02031, Kennedy School of Government, Harvard University, 2002) at 21. Stavins and Barrett argue that it is very costly to attempt to use BTAs on all relevant products and attempting to impose them on a subset of products would be ineff ective. Also see Chapter 8.
223. See generally Jide Nzelibe, 'The Case Against Reforming the WTO Enforcement Mechanism' (2008) University of Illinois Law Review 319; Alan Sykes, 'The Economics of Public International Law' (University of Chicago Law and Economics Olin Working Paper, No. 216, 2004).
224. P. Krugman and M. Obstfeld, International Economic Theory and Policy, 7th edn (London: Pearson, 2005) at 184-6 (discussing loss of welfare from tariff s, particularly if the country is small in the sense of not being able to aff ect the world price of the good).
225. For discussions of the diffi culties of developing countries using the dispute settlement system, see, e.g., Chad P. Bown and Bernard M. Hoekman, Developing Countries and Enforcement of Trade Agreements: Why Dispute Settlement is Not Enough (2008) 42 (1) Journal of World Trade 177, 177-203; Andrew T. Guzman and Beth A. Simmons, Power Plays and Capacity Constraints: The Selection of Defendants in World Trade Organization Disputes, (2005) 34 Journal of Legal Studies 557.
226. Cited in International Centre for Trade and Sustainable Development (ICTSD), Trade and Climate Change Briefi ng, Issue 3, Border Carbon Adjustment, UNFCCC COP 15, Copenhagen 2009, 5 December 2009
227. Letter to EU Commission President Jose Manuel Barroso, January 2008
228. International Centre for Trade and Sustainable Development (ICTSD), Trade and Climate Change Briefi ng, Issue 2, Climate Change Financing, UNFCCC COP 15, Copenhagen 2009, 5 December 2009
229. Amy Kamin, 'India Lambasts "Pernicious" US Carbon Tariff s', Financial Times, 20 June 2009. See also 'China Joins Carbon Tax Protest', Financial Times, 3 July 2009.
230. Peter Mandelson, 'How Trade Can be Part of the Climate Change Solution', Comment by Peter Mandelson, European Union Trade Commissioner, Brussels, 18 December 2006, p. 17.
231. Mia Shanley and Ilona Wissenbach, 'Germany Calls Carbon Tariff s Ecoimperialism', Reuters.com, 24 July 2009.
232. Editorial Comment, 'One Easy Way to Start a Trade War', Financial Times, 9 December 2009. The author opined further that 'as a ruse to keep trade lawyers in gainful employment, carbon border taxes are perfect. As policy, they would likely be a disaster.'
233. They would only be useful to the extent they assisted in securing an eff ective policy signal for emissions mitigation. John Stephenson and Simon Upton, Competitiveness, Leakage, and Border Adjustment: Climate Policy Distractions? (Paris: Organisation for Economic Co- operation and Development (OECD), Round Table on Sustainable Development SG/SD/RT(2009)3, 2009).
234. T. Epps and M. Trebilcock, 'Special and Diff erential Treatment in Agricultural Trade: Breaking the Impasse', in Chantel Thomas and Joel P. Trachtman (eds), Developing Countries in the WTO Legal System (Oxford: Oxford University Press, 2009).
235. Scott Barrett, Why Cooperate? The Incentive to Supply Global Public Goods (Oxford: Oxford University Press, 2007) at 82-3
236. Barrett, ibid. Scott Barrett, Environment and Statecraft: The Strategy of Environmental Treaty- Making (Oxford: Oxford University Press, 2003) and Henrik Horn and Petros Mavroidis, 'International Trade - Dispute Settlement' in Alan O. Sykes and Andrew Guzman (eds), Research Handbook in International Economic Law (Cheltenham, UK and Northampton, MA, USA: Edward Elgar Publishing Ltd, 2008).
237. See Barrett (2003), ibid. and Scott Barrett and Robert Stavins, 'Increasing Participation and Compliance in International Climate Change Agreements' (2003) 3 International Environmental Agreements: Politics, Law and Economics 349.
238. Scott Barrett, 'Climate Treaties and the Imperative of Enforcement' (2008) 24 (2) Oxford Review of Economic Policy 239
239. United States - Import Prohibition of Certain Shrimp and Shrimp Products (1998) WTO Doc. WT/DS58/R (Panel Report) (the fi nding on the violation of Article XI was not appealed).
240. The panel relied on the Ad note to Article III which states: 'Any internal tax or other internal charge, or any law, regulation or requirement of the kind referred to in paragraph 1 which applies to an imported product and to the like domestic product and is collected or enforced in the case of the imported product at the time or point of importation, is nevertheless to be regarded as an internal tax or other internal charge, or a law, regulation or requirement of the kind referred to in paragraph 1 and is accordingly subject to the provisions of Article III.' See European Communities - Measures Aff ecting Asbestos and Asbestos- Containing Products (2000) WTO Doc. WT/DS135/R (Panel Report).
241. United States - Import Prohibition of Certain Shrimp and Shrimp Products (US - Shrimp I) (1998) WTO Doc. WT/DS58/AB/R (Appellate Body Report).
242. Jacob Werksman, James Bradbury and Lutz Weischer, 'Trade Measures and Climate Change Policy: Searching for Common Ground on an Uneven Playing Field' (World Resources Institute Working Paper, December 2009)
243. But see Gary Hufbauer, Steve Charnovitz and Jisun Kim, Global Warming and the World Trading System (Washington, DC: Peterson Institute for International Economics, 2009) (arguing that the Appellate Body has not closely examined the actual eff ectiveness of measures under Article XX(b) (at 84))
244. United States - Import Prohibition of Certain Shrimp and Shrimp Products (US - Shrimp I) (1998) WTO Doc. WT/DS58/AB/R (Appellate Body Report).
245. Scott Barrett, Why Cooperate? The Incentive to Supply Global Public Goods (Oxford: Oxford University Press, 2007)
246. See Scott Barrett, Environment and Statecraft: The Strategy of Environmental Treaty- Making (Oxford: Oxford University Press, 2003), and Scott Barrett and Robert Stavins, 'Increasing Participation and Compliance in International Climate Change Agreements' (2003) 3 International Environmental Agreements: Politics, Law and Economics 349
247. Scott Barrett, 'Climate Treaties and the Imperative of Enforcement' (2008) 24 (2) Oxford Review of Economic Policy 239
248. United Nations Environment Programme, Trade Related Measures and Multilateral Environmental Agreements (UNEP, Economics and Trade Branch, Division of Technology, Industry and Economics, 2007)
249. The closest the Kyoto Protocol comes to a trade measure is a proposed restriction on trading in emission permits if parties do not comply with their Kyoto commitments. However, whether or not this constitutes a trade measure depends on whether international trade in emission permits is covered by the WTO agreements which is controversial. See Duncan Brack and Kevin Gray, 'Multilateral Environmental Agreements and the WTO' (The Royal Institute of International Aff airs and International Institute for Sustainable Development, September 2003).
250. See, for example, Caroline Henckels, 'GMOs in the WTO: A Critique of the Panels' Legal Reasoning in EC - Biotech' (2006) 7 Melbourne Journal of International Law 278 and Robert Howse and Henrik Horn, 'European Communities - Measures Aff ecting the Approval and Marketing of Biotech Products' (2009) 8 (1) World Trade Review 49
251. See J. Pauwelyn, 'The Role of Public International Law in the WTO: How Far Can We Go?' (2001) 95 (3) American Journal of International Law 535.
252. Brack and Gray, supra note 11. For example, the Cartagena Biosafety Protocol states that it 'shall not be interpreted as implying a change in the rights and obligations of a Party under any existing international agreements' (Preamble).
253. Gary Hufbauer, Steve Charnovitz and Jisun Kim, Global Warming and the World Trading System (Washington, DC: Peterson Institute for International Economics, 2009)
254. Risa Schwartz, 'Trade Measures Pursuant to Multilateral Environmental Agreements - Developments from Singapore to Seattle' (2000) 9 RECIEL 63
255. See Jagdish Bhagwati, Termites in the Trading System (New York: Oxford University Press, 2008) and Razeen Sally, New Frontiers in Free Trade: Globalization's Future and Asia's Rising Role (Washington, DC: Cato Institute, 2008). See also Michael Trebilcock and Robert Howse, The Regulation of International Trade, 3rd edn (New York: Routledge, 2005) for a summary of the debates about preferential trade agreements.
256. Available online at http://unfccc.int/resource/docs/2009/cop15/eng/o7.pdf (date accessed: 22 January 2010).
257. For example, the US committed to emissions reduction by 2020 'in the range of 17%, in conformity with anticipated US energy and climate legislation, recognizing that the fi nal target will be reported to the Secretariat in light of enacted legislation' (see letter from Todd Stern, US Special Envoy for Climate Change, to the UNFCCC dated 28 January 2010)
258. WTO, 'Lamy Praises Copenhagen Eff orts, Calls for More To Be Done' (21 December 2009) (accessed 8 January 2010 at http://www.wto.org/english/news_e/ news09_e/climate_21dec09_e.htm).
259. Mahesh Sugathan, Liberalization of Trade in Environmental Goods for Climate Change Mitigation: The Sustainable Development Context (International Centre for Trade and Sustainable Development (Geneva), International Institute for Sustainable Development (Winnipeg), for the Trade and Climate Change Seminar, Copenhagen, Denmark, 2008) at 2
260. Ludivine Tamiotti et al., Trade and Climate Change: A Report by the United Nations Environment Programme and the World Trade Organization (Geneva: WTO, 2009) at 81.
261. International Energy Agency 2008. Cited in Ronald Steenblik, Takenori Matsuoka and Jim Hight, Facilitating Trade in Selected Climate Changemitigation Technologies in the Electricity Generation and Heavy- industry Sectors (OECD Global Forum on Trade: Trade and Climate Change, COM/TAD/ENV/ JWPTE(2008)28, 2008) at 7.
262. E. Claro et al., Trade in Environmental Goods and Services and Sustainable Development: Domestic Considerations and Strategies for WTO Negotiations (Geneva: ICSTD Environmental Goods and Services Series, Policy Discussion Paper, International Centre for Trade and Sustainable Development, 2007) at xvi. The World Development Report 2010 noted that while traditionally developing countries have been importers of clean technologies, as a result of their improving investment climate and large consumer base, developing countries are in fact increasingly becoming major players in the manufacture of clean technologies. World Bank, World Development Report 2010: Development and Climate Change (Washington, DC: The World Bank, 2010) at 254.
263. CTE in Special Session, Environmental Goods for Development - Submission by Brazil - Paragraph 31(iii), WTO Doc. (TN/TE/W/59) 8 July 2005.
264. See also E. Claro et al., Trade in Environmental Goods and Services and Sustainable Development: Domestic Considerations and Strategies for WTO Negotiations (Geneva: ICSTD Environmental Goods and Services Series, Policy Discussion Paper, International Centre for Trade and Sustainable Development, 2007) at 1.
265. Organisation for Economic Co- operation and Development (OECD), Policy Brief - Opening Markets for Environmental Goods and Services (Paris: OECD, 2005) at 3
266. The World Bank, International Trade and Climate Change - Economic, Legal, and Institutional Perspectives (Washington, DC: The World Bank, 2008) at 89
267. The World Bank, International Trade and Climate Change - Economic, Legal, and Institutional Perspectives (Washington, DC: The World Bank, 2008) at 84
268. Mahesh Sugathan, 'Environmental Goods: A Doha Round Deliverable for Climate Change?', in Climate, Equity and Global Trade (Geneva: International Centre for Trade and Sustainable Development (ICTSD), Selected Issue Briefs No. 2, 2007) at 1.
269. Note in this regard a 2002 submission by Qatar to the CTE in Special Session in which it cautioned against establishing a distinction between product end- use and PPMs, arguing that energy has to do with processes of production. It queried whether an end- use criterion could take account of the entire energy life- cycle of a product. Committee on Trade and Environment in Special Session, Summary Report of the Third Meeting of the Committee on Trade and Environment in Special Session 10-11 October 2002 (Committee on Trade and Environment in Special Session, 2002). Qatar was supported in its eff orts by Saudi Arabia. Committee on Trade and Environment in Special Session, Summary Report of the Tenth Meeting of the Committee on Trade and Environment in Special Session 12-13 October 2004 (Committee on Trade and Environment in Special Session, 2004).
270. Countries to have made proposals include: the EC (TN/TE/W/47); Japan (TN/MA/W/15); Korea (TN/TE/48); Qatar (TN/TE/W/14, W/19 and W/27); Switzerland (TN/TE/W/57); Chinese Taipei (TN/TE/W/44); and the United States (TN/TE/W/52)
271. WTO Doc. JOB(04)/98. This list was a reduction in the number of goods listed as compared with a previous Friends list that included 400 products.
272. The World Bank, International Trade and Climate Change - Economic, Legal, and Institutional Perspectives (Washington, DC: The World Bank, 2008) at 79
273. Submission by Brazil, WTO Doc. TN/TE/W/59.
274. See for example the submission by Kenya, WTO Doc. TN/MA/W/40, and Brazil's submission regarding ethanol.
275. Colombia has informally suggested an approach whereby Members would only have to liberalize trade in goods used in a project, programme, plan, or system deemed to have verifi able environmental benefi ts by a designated national authority. WTO Doc. JOB(06)149. See also Howse et al., who refer to a system of duty drawbacks where duty collected at the border is refunded based on an application by the ultimate purchaser certifying a particular use for the goods. Robert Howse, Petrus van Bork and Chartotte Hebebrand, WTO Disciplines and Biofuels: Opportunities and Constraints in the Creation of a Global Marketplace (Washington, DC: International Food and Agricultural Trade Policy Council, 2006).
276. At the time of writing, it has been reported that frustration with the slow pace of the Doha Round negotiations has led the EU, the United States, China, and other OECD members to engage in 'closed- door talks' to negotiate a deal to liberalize environmental goods. International Centre for Trade and Sustainable Development (ICTSD), 'New Deal Could Slash Tariff s on Green Goods in OECD, China' (2009) 13 (36) Bridges Weekly Trade News Digest.
277. Nicholas Stern, The Global Deal: Climate Change and the Creation of a New Era of Progress and Prosperity (New York: Public Aff airs, 2009), at 204
278. Gary Hufbauer, Steve Charnovitz and Jisun Kim, Global Warming and the World Trading System (Washington, DC: Peterson Institute for International Economics, 2009)
279. R. Howse, 'Subsidies to Address Climate Change: Legal Issues' (Winnipeg, Manitoba: International Institute for Sustainable Development, 2009).
280. There would be some overlap of reporting in the case of climate measures as they may, for example, have to be reported to the Climate Change Committee but also the TBT Committee. A solution may be for the measures to be notifi ed to both committees but the Climate Change Committee would consider any climate measures (with perhaps a representative of the TBT or SPS Committee as appropriate on the Climate Change Committee).
281. By way of example, between 1995 and 2007, a total of approximately 245 specifi c trade concerns were brought to the attention of the SPS Committee. During this time, only 28 requests were made for formal consultations under the Dispute Settlement Understanding. Of these, fi ve disputes were subsequently heard by a Dispute Panel. The number of trade concerns is as cited in a summation paper by the Secretariat: WTO Secretariat, Specifi c Trade Concerns - Note by the Secretariat (2007), WTO Doc. G/SPS/GEN/204/Rev.7.
282. Zhong Xiang Zhang, 'Climate Change Meets Trade in Promoting Green Growth: Potential Confl icts and Synergies' (15 July 2009). Available at SSRN: http://ssrn.com/abstract=1511982.
283. Note that a Non- aggression Clause is diff erent from the Peace Clause discussed earlier in that the Non- aggression Clause would entail not taking unilateral action against other members while the Peace Clause would involve a commitment not to challenge the measures of other members
284. Robert Howse, 'Democracy, Science and Free Trade: Risk Regulation on Trial at the World Trade Organization' (2000) 98 Michigan Law Review 2329
285. A. Sykes, 'The Questionable Case for Subsidies Regulation: A Comparative Perspective' (Stanford University School of Law, Law and Economics Research Paper Series, No. 380, 2009).
286. See, in the health context, Tracey Epps, International Trade and Health Protection: A Critical Assessment of the WTO's SPS Agreement (Cheltenham, UK and Northampton, MA, USA: Edward Elgar, 2008)
287. See S. Barrett, 'Climate Treaties and the Imperative of Enforcement' (2008) 24 (2) Oxford Review of Economic Policy 239 (arguing for sectoral agreements).