Library of Congress

Law Library of Congress

The Library of Congress > Law Library > News & Events > Global Legal Monitor

United Nations; World Trade Organization: Report on Connection Between Climate Change and Trade Issued

(July 1, 2009) The World Trade Organization (WTO) and the United Nations Environment Programme released a report on June 26, 2009, detailing the connections between trade and climate change. The document “examines the intersections between trade and climate change from four perspectives: the science of climate change; economics; multilateral efforts to tackle climate change; and national climate change policies and their effect on trade,” under its four chapters. (Press Release No. 559, WTO, WTO and UNEP Launch a Report Explaining for the First Time the Connections Between Trade and Climate Change (June 26, 2009), available at The 166-page study includes a number of charts and tables and has a detailed bibliography and a detailed table of contents (in addition to the opening table of contents) appended.

The chapter on economics (under the heading “Trade and Climate Change: Theory and Evidence”) looks at the effects of trade and trade opening on greenhouse gas (GHG) emissions, the contribution of trade and trade opening to mitigation and adaptation efforts, and the possible impact of climate change on trade. As the WTO press release on the new report states, “[s]ectors such as agriculture, forestry, fisheries, tourism and transport infrastructure which are critical for developing countries are more specifically affected. These impacts will often have implications for trade.” (Id.)

The chapter on multilateral work related to climate change covers multilateral action to reduce greenhouse gas emissions (under the U.N. Framework Convention on Climate Change (UNFCCC), the Kyoto Protocol, post-2012 UNFCCC and Kyoto Protocol negotiations process, and the Montreal Protocol). It also examines trade negotiations, to improve access to climate-friendly goods and services and to enhance mutual supportiveness between trade and the environment. “Contrary to some claims,” the report contends, “trade and trade opening can have a positive impact on emissions of greenhouse gases in a variety of ways including accelerating the transfer of clean technology and the opportunity for developing economies to adapt those technologies to local circumstances.” (Id.)

The chapter on national policies and their trade implications has sections on: 1) price and market mechanisms to internalize the environmental costs of GHG emissions (domestic measures, border measures, and relevant WTO rules); 2) financial mechanisms to promote the development and deployment of climate-friendly goods and technologies; and 3) technical requirements to promote the use of climate-friendly goods and technologies. The jurisdictions discussed include a number of European countries, as well as Australia, Canada, Japan, New Zealand, and the United States.

Domestic measures of price and market mechanisms for handling GHG emissions costs included in the study are taxes on GHG emissions (in particular “carbon taxes”) and emissions trading schemes; the environmental effectiveness of the tax schemes and emissions trading schemes is also examined. The sub-section on border measures examines concerns over competitiveness and carbon leakage and the measures aimed at “offsetting possible asymmetries in competitiveness and preventing carbon leakage,” such as border tax adjustments to carbon taxes or energy taxes, border measures adopted in relation to emission trading schemes, and other measures. (TRADE AND CLIMATE CHANGE (2009), WTO website, (last visited June 26, 2009).) The latter include the possible imposition of an import charge or higher tariff; a countervailing duty against “de facto subsidies” or an anti-dumping duty against “environmental dumping,” raised on goods imported from countries that do not impose climate change-related regulations; and a tax on certain means of international transport, e.g., trucks that drive through a country's territory, based on an evaluation of the carbon dioxide they emit. (Id.)