From Daniel Gros at VOX:
Why a cap-and-trade system can be bad for your health
The purpose of a cap-and-trade system is to help in the fight against global climate change. This column warns that a unilateral approach could increase global emissions by shifting production to more carbon-intensive methods abroad. Acting alone, the EU’s Emission Trading Scheme may be doing more harm than good.
From Biswajit Dhar and Kasturi Das of RIS:
The European Union’s Proposed Carbon Equalization System: Can it be WTO Compatible?
... this paper makes an attempt to analyze the WTO compatibility or otherwise of the border measure proposed by the EU in its post-2012 climate energy package. The analysis focuses on two sets of issues: (i) whether the proposed border measure could conform to the ‘border tax adjustment’ provisions and the Most Favoured Nation (MFN) clause of the GATT (General Agreement on Tariffs and Trade), and if not then (ii) whether the EU could justify it under the ‘General Exceptions’ provisions included in Article XX of the GATT that allow WTO Members, subject to certain conditions included in its chapeau, to deviate from their GATT obligations to serve certain legitimate policy objectives, including environmental objectives. The analysis presented in this paper indicates that the EU could face significant difficulties in establishing that the proposed border measure would be WTO-compliant. However, the devil would finally lie in the details.
