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Title

Trade and Climate Change: The Challenges Ahead

Authors
Mathys, Nicole
Publication Clermont-Ferrand: Fondation pour les Études et Recherches sur le Développement International, 2010
Collection FERDI, Working Paper; WP 14.2010
Description 65 p.
Abstract The outcome of the 15th conference of the Parties to the UNFCC showed a shift from a top-down approach with a collective target favoring environmental objectives to a bottom-up accord favoring political feasibility, with no meaningful binding agreement in sight, as the global climate regime and the global trade policy regime represented by the WTO appear to be on a collision course. Following a review of the alternative architectures for the next Climate Change Agreement, the paper outlines four areas in which trade will play a role: as a purveyor of technological transfer; as a mechanism to separate where abatement takes place from who bears the cost of abatement; as a participation mechanism; and as a way to address the pressures for border adjustments. Political-economy considerations are invoked to predict that a target system with a carbon credit system will be preferable to a carbon tax or to a portfolio system of treaties. A review of evidence on the extent of pollution haven effects suggests that these should be small under climate mitigation policies, especially if efforts are undertaken to raise the price of energy. A discussion of border measures to complement mitigation policies suggests that they are unlikely to be found compatible with the environmental exceptions allowed under article XX of the GATT. The review concludes that an umbrella agreement with leeway where much initial mitigation would first take place unilaterally as under the early days of the GATT might be the most promising way ahead while preserving an open World Trading System and environmental integrity.
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DE MELO, Jaime, MATHYS, Nicole. Trade and Climate Change: The Challenges Ahead. 2010 https://archive-ouverte.unige.ch/unige:55403

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Deposited on : 2015-04-12

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