Legal Analysis Of Carbon Tariffs Under The WTO Framework

Since the middle of 20 th century, preventing global warming and protecting the environment has become a common issue. As a result, multilateral environmental agreements which legally based on United Nations Framework Convention on Climate Change and Kyoto Protocol have been established. Carbon emission reduction commitments of developed countries have been set up. The climate conference in Paris was held on Dec.12,2015, the concept of low-carbon development will be spread all over the world, which aims to yield a new international agreement to reduce greenhouse gases beyond 2020 when the 1997 Kyoto Protocol expires.Obviously, the Paris agreement has great influence. On Apr.4,2016, 175 countries including China has signed the agreement and put forward to approving it as soon as possible.In this context, American and the EU have passed a series of Bills which contain carbon tariffs. For example, the EU has established the EU-ETS. Besides, the decision of levying carbon tax since January 1st, 2012 to all the arrival and departure flights in EU Member States airports has put Carbon tariffs into practice. In 2009, American passed a bill to levy carbon tariffs, too. Proposed by developed countries to impose carbon tariffs on imported products, it will cause a very bad influence to economy of developing countries.Under the WTO framework, article 2.2(a) of GATT 1994 provides a border adjustment tax,the carbon tariff is likely to be expressed as a import-related border adjustment tax. When carbon tariff is consistent with the principle of national treatment and the principle of most-favored-nation treatment, it will meet WTO rules.Even if carbon tariff doesn't accord with the principles above, it may be also legitimate under Article XX of GATT 1994. Because carbon tariff can help protect natural resources; What's more, as it not only protects the global atmosphere but also prevents some plants and animals from extinction because of climate change, it also accord with Article XX(g) of GATT 1994. In order to determine whether carbon tariffmeet Article XX of GATT 1994, we still need to analyze whether the carbon tariff is applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions. If the answer is negative,the carbon tariff conform to the WTO rules.