Enhancing differential treatment in the UN Climate Regime - defining a role for the World Trade Organization

Abstract

In recent decades, ambitious climate policies in some developed countries have evoked concerns about the damage to international competitiveness for domestic industries and carbon leakage. In this context, a number of unilateral trade measures related to climate change mitigation have been proposed by developed countries such as the United States and the European Union. Such measures have significant impact on economic activity and international trade. In this context, developing countries face greater difficulties in balancing climate mitigation and trade development. Differential treatment for developing and least developed countries is a fundamental principle in the UN Climate Regime; therefore, one of the major issues in the implementation of World Trade Organization (WTO) law on climate change mitigation related trade measures is the extent to which the rights and obligations of developing and least developed countries, based on their levels of development, should differ from those of developed countries and how this should be achieved. This thesis aims to define a role for the World Trade Organization (WTO) in facilitating global climate change mitigation through aligning differential treatment for developing and least developed countries in the UN Climate Regime and of those in the WTO. The WTO's environmental protection provisions only emphasise the principle of non-discrimination but neglect differential treatment for developing countries, making the application of these provisions seem fair, when in fact it is unfair. Therefore, in order for the WTO to facilitate the global climate change mitigation, it is important the differential treatment rules in the WTO environmental protection provisions is consistent with the differential treatment rules in the UN Climate Regime. None of the existing literature systematically examines the similarities and differences between the differential treatment rules in the UN Climate Regime and the WTO. This thesis addresses this gap by analysing and comparing the differential rules between these two regimes to identify changes required for harmonisation. This thesis recommends that the WTO should take responsibility to develop cohesion of and improve upon differential treatment in the two regimes in the form of a WTO Climate Waiver. It also provides specific suggestions for the waiver including setting categories for developing countries, allowing Border Carbon Adjustments (BCAs) with the condition of differential treatment, making financial mechanisms mandatory and improving differential treatment in the WTO dispute settlement mechanism.