Unilateral Trade-related Climate Change Measures

Climate change mitigation has become one of the most relevant topics today, and it will continue for years to come. It is a concern that has implications in economics, law, science, human rights, technology, international relations and ethics, to name but a few fields of knowledge. Climate change is a global problem that knows no geographical barriers. International law is not well equipped to face the challenges of climate change. Global climate is an indivisible public good. International law currently faces the challenge of fragmentation and the need to bring greater coherence to a fragmented system in combating climate change. The aim of this article is to explain the trade implications of climate change mitigation policies by analyzing a couple of areas where the international regimes for trade and climate change mitigation/energy may potentially clash: 1) border carbon adjustments and 2) applying subsidies and similar measures in order to encourage environmentally-friendly technologies. After the introduction, Section 2 provides an analysis on the link between the legal regimes of international trade and climate change. Section 3 compares both regimes and Section 4 offers an overview of unilateral trade-related climate change measures. Section 5 examines the main WTO provisions on subsidies and analyzes the WTO cases on subsidies for renewable energy. Section 6 focuses on the inclusion of aviation in the EU Emission Trading Scheme (EU ETS) and the potential expansion of the EU ETS to the shipping industry. Section 7 concludes the article.