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Climate Change and the WTO: Legal Issues Concerning Border Tax Adjustments
Published in Japanese Yearbook of International Law 53, 2010
Authors:
Henrik Horn and Petros Mavroidis
Summary:
In this paper we discuss how a WTO adjudicating body would likely adjudicate a dispute concerning the legality of a Border Carbon Adjustment/Border Tax Adjustment scheme under the GATT, and we juxtapose it to our own preferred approach. There are some noticeable di¤erences in the two approaches, the main one being the manner in which the two approaches control for the default rules allocating jurisdiction across states under public international law. In our view, relying on the default rules is a matter of legal compulsion anyway. But explicit reliance on the default rules would lead adjudicating bodies to an examination of the reasonableness in the exercise of jurisdiction, a review
which is alien to the requirements of the GATT substantive obligations. Our proposed approach allows WTO panels to thwart unwarranted exercises of jurisdiction (that is, cases where no interest to regulate exists other than maybe protectionism). It also opens up the door to the legal relevance of multilateral environmental treaties (MEAs) that have been and are being concluded to address global environmental concerns.
Date:
2010
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