As climate change accelerates into becoming a challenge that needs to be tackled througj a worldwide effort, the IPCC reports showed that climate change was man-made. Discussions at the international level are undergoing at the UNFCCC(United Nations ...
As climate change accelerates into becoming a challenge that needs to be tackled througj a worldwide effort, the IPCC reports showed that climate change was man-made. Discussions at the international level are undergoing at the UNFCCC(United Nations Framework Convention on Climate Change) forum, and major countries around the world are implementing various laws and policies to address climate change. Korea also enacted the Green Growth Framework Act to address climate change, and introduced or plans to introduce policies like cap-and-trade and incentives for renewable energy. When implementing laws and policies on climate change, imposing additional levies, providing benefits, or regulating imports/exports in regard of a specific entity or group can go against international trade rules. For instance, when subsidies for ecofriendly industries, ecolabels, technology regulations and standards, carbon tax and cap-and-trade act as trade barriers, these various environmental policies can conflict with international trade rules like GATT 1994, SPS Agreement, TBT Agreement, TRIPS Agreement, TRIMS Agreement, Safeguard Agreement, and SCM Agreement and likely cause acute tension between states. This phenomenon is already happening between WTO member states and is likely to increase in the future.
In this context, he goal of this study is to analyze the relationship between WTO rules and the climate change laws and policies of various states and propose a way for the reconciliation of the two regimes. This study was conducted by analyzing articles written by relevant scholars, interviewing staff at relevant institutions, sharing information by holding and participating in relevant conferences and acquiring advice from academics and practitioners. As a result, this study confirmed the following. First, based on the analysis of the UNFCCC, Kyto Protocol and the subsequent agreements, this study confirmed that the Post-Kyoto negotiations of the Bali Road Map, Copenhagen Accord, Cancun Agreements were conducted on a two-track basis, the AWG-LCA track and the AWG-KP track, and that there were discussions about the establishment of a Green Climate Fund(GCF). Also, this study confirmed that the Durban Platform extends the Kyoto Protocol (the 2nd phase started on Jan. 2013), establishes the AWG-DP, initiates the Post-2020 negotiations and overall seeks for a new and binding climate regime.
Second, based on analysis, this study confirmed that the international climate change regime, including the Kyoto Protocol, and the WTO are two distinct international law systems pursuing different objectives, and that there lies the inherent possibility of the two regimes colliding. The climate change policies that have the possibility of clashing with the WTO rules are the cap-and-trade policy, which is one of the Kyoto Protocol’s Flexibility Mechanisms, carbon tax, carbon labeling, regulations on the fuel efficiency of automobiles and renewable energy support schemes. This study especially pinpoints that in the case of the cap-and-trade system, inconsistencies with WTO rules may occur according to the specifics of each particular system, and that some kinds of subsidies addressing climate change can be inconsistent with the SCM Agreement. The study also confirmed that EU’s policy of applying the EU-ETS to the aviation sector is an international trade law issue that needs to be dealt with. According to one of the results of the study, there is the possibility of Korea’s climate change policies being challenged by other states as subsidies inconsistent with the SCM Agreement and be subject to either countervailing measures or the WTO dispute settlement mechanism. Also, recently the renewable energy policies of various countries are under international trade law scrutiny, and through analyzing the WTO panel and Appellate Body reports, this study found that local content requirements included in renewable energy policies are not regarded as government procurement.
Lastly, by this study, the team found out that the following terms need to be kept in mind for the conciliation of Korea’s climate change law system with WTO rules. Firstly, since the number of companies benefiting from subsidies lowers the possibility of subsidies being found as “specific,” subsidy policies need to be designed to let as many companies as possible to benefit from the subsidy. Secondly, as a way to be neutral to the “specificity” issue, the wording of the climate change laws on the subjects applicable for subsidies should not pinpoint support for a particular technology. Thirdly, as can be seen from Canada’s Ontario renewable energy case, caution should be exercised in regard with local content requirements. In other words, local content requirements should not be used when designing climate change laws and policies. Fourthly, if local content requirements cannot be omitted from the policy, the requirement at least should be added in a way that fits the government procurement carve-out. Fifthly, implementation of the laws and policies of climate change need to be done in a transparent and impartial way. Sixthly, relevant climate change laws and policies should be designed in a way that let those laws and policies be justified by GATT’s general exception clause even if those laws and policies are found to be inconsistent with WTO obligations.