Legality Of Carbon Tariffs And Strategy Analysis

For a common response to global climate change, there was established "common but differentiated responsibilities" principle in international environmental cooperation, the developed countries were assumed the mandatory emission reduction obligations, which had a contradiction between reducing greenhouse gas emissions and protecting domestic industries. Therewith, the EU proposed creatively that imposing carbon tariff on imported products, which were from the states not taken the mandatory emission reduction obligations, thereby, to achieve the dual purposes of preventing "carbon leakage" and protecting domestic industries’competitiveness. While the United States became the pioneer of carbon tariff basing on the consideration of multiple factors, such as international political and economical interests, the House of Representatives passed the American Clean Energy and Security Act in June2009, which provides that all imported products from the countries without adopting carbon-reduction measures should purchase emission reserves for greenhouse gas in the process of manufacturing, it’s carbon tariff. Once this unilateral environmental trade measure was putted forward, its essence of trade protectionism has been condemned and criticized by the developing countries including China. Although carbon tariff has been not completed domestic legislative procedures of United States, it is necessary to be against a rainy day.This article takes the nature of carbon tariff under the background of global climate change as the breakthrough point, by referring to carbon tariff’s system design of United States, analyses and estimates whether the carbon tariff is legitimate or not in WTO framework, bases on the effects of carbon tariff, and puts forward ideas on how to deal with carbon tariff about China. The article constitutes with four parts in addition to the introduction and epilogue.Introduction section includes the topic of studying of domestic and foreign researching present situation, significances, purposes, thoughts and methods.Part Ⅰ, Firstly leads to carbon tariff by introducing the background briefly. Secondly to clarify the basic meaning of carbon tariff, it is concluded that the nature of carbon tariff is Carbon-based Border Tax Adjustments by analyzing, and its essential characteristic is Green Trade Barriers. Finally introduces the rules of carbon tariff of United States, which will be a reference below research on carbon tariff’s legal issues.Part Ⅱ, based on the rules of WTO to estimate the legitimacy issues of carbon tariff, it can be draw such conclusions by a detailed analysis, although carbon tariff matches with the rules of GATT’s BTA in import link and export link, due to it applying to carbon emissions volume of energy-intensive products in the process of producing and manufacturing, the treatment will be inconsistent with having likely domestic products, and importing products and any third country’s products, which will infringe the principle of most-favored-national treatment and national treatment because of the different standard to measure carbon emissions volume. At the same time, according to the specific interpretation and application of the Panel and Appellate Body of WTO on "environmental exemption term", carbon tariff can’t invoke this provision, because it is a "disguised restriction on international trade". Whereby, carbon tariff does not have legitimacy in the multilateral trade legal system.Part Ⅲ, despite China has made efforts in carbon reduction, and it still faces dilemma, carbon tariff would have negative effects and influences on economical development in combination with China’s main export market and the distribution of export product.Part Ⅳ, this article puts forward coping ideas and strategies from and national aspects based on the effect of carbon tariffs on China’s economy. In term of international aspect, insisting on the principle of "common but differentiated responsibilities" and develops environmental diplomacy actively, moreover, making fully preparation for proceedings under WTO dispute settlement mechanism. In term of national aspect, the two strategies of building corresponding carbon tax and carbon emission permits trade system in domestic, and improving a complete set of legal system concerning carbon reduction, which can be a direct response to carbon tariff.