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International Emissions Trading And WTO Rules

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Chapter Summary

The Kyoto Protocol sets a cap on emissions from Parties included in its Annex B. These States are allowed to sell or buy parts of the assigned amounts. In addition, States can trade with tradable units derived from project mechanisms, such as Joint Implementation or the Clean Development Mechanism, i.e., Removal Units (RMUs), Emission Reduction Units (ERU), and Certified Emission Reductions (CERs). This chapter assesses governmental regulation related to private exchanges of emission units with regard to how it directly or indirectly affects rights and obligations of States under world trade organization (WTO) law. It focuses on the energy market and explores its interaction with the distribution of emission units and the requirements for trade with these units. A climate measure, such as international emissions trading, is likely to be provisionally justifiable by General Agreement on Tariffs and Trade (GATT) Article XX(g). The chapter examines Article XX in greater detail.

Keywords: General Agreement on Tariffs and Trade; international emissions trading; Kyoto Protocol; world trade organization (WTO) law

10.1163/ej.9789004166974.i-428.65
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