Study On Carbon Tariff Under WTO

Global climate change immersing into and influencing human existence and development is a great challenge of all countries. International cooperation thereof has been initiated and the preliminary international climate law system based on United Nations Framework Convention on Climate Change and Kyoto Protocol for purpose of slow down climate deterioration by controlling and cutting greenhouse gases emission has been set up. However, disputes concerning division of emission cutting responsibilities arouse between developed countries and developing countries for they stand on their own side. International climate cooperation is hard to realize in this respect. Owing to worries about loss of competitiveness and"carbon leakage"arising out of emission cutting measures, developed countries attempts to indirectly force developing countries to undertake the emission-cutting responsibilities by taking unilateral trade measures so as to share the fruits of emission cuts globally. Carbon Tariff initiated by EU represents such measures. Hence the relationship between multilateral trade system and climate change ranks among the front-line topics of academic research. Carbon Tariff is the mirror of the contradiction between free trade and environmental protection under jurisdiction of WTO and the consequence of fierce game-playing between developed powers and developing powers during the process of international negotiation.This paper starts from the rationality of Carbon Tariff under the background of climate change, analyzes the legitimacy of this system under WTO system and discusses the path of WTO in coordinating trade with environment and China's criteria for selection of Carbon Tariff strategies. This article consists of 6 sections besides Introduction and Conclusion.The Introduction briefs influence of climate change and international climate cooperation and describes the background and cause of Carbon Tariff, i.e. the collective action of international emission cuts is trapped in a dilemma and EU is confronted with massive emission-cutting pressure. This article also explains the rationale by choosing this topic and the significance of this study after analyzing the influence of Carbon Tariff on China.Carbon Tariff is naturally a border adjustment measure, and introduces U.S. carbon tariff system. By analyzing U.S. intent of proposing carbon tariff and the effect of implementation, this article believes this system is apparently unilateralism and trade protectionism.Section II analyzes the reasonableness of Carbon Tariff under the background of climate change. This article argues that negation of"Carbon Tariff"by citing"U.S. carbon tariff system"goes too subjective. The issue shall be comprehensively considered from the perspective of the relationship between trade and environment before jumping to conclusion. In order to address this issue systematically, this section explains causes of disputes between free trade and environmental protection under WTO system and controversy concerning unilateral trade measure between free-traders and environmentalists, and holds that Carbon Tariff can promote the progress of achieving global emission cutting goals and guarantee for long-term development right of developing countries. This section, based on the theory of environmental cost internalization and trade effect, ends up with a statement that Carbon Tariff imposes no significant restrictions on free trade, and thus it is reasonable to some extent by taking example of influence of environmental tariffs on China's steel export.Section III details the legitimacy of U.S. carbon tariff system under WTO. This article holds that the legitimacy of this system is plausible according to current WTO rules. On the one hand, query on adaptability of carbon tariff to frontier regulation tax exists. On the other hand, support from disputer solving organs is uncertain when U.S. cites the Article XX of GATT 1947 to defense even if the system violates the basic principles of WTO.Section IV provides views and suggestion on how to construe carbon tariff system by holding that carbon tariff shall adhere to base principles, for example,"common but distinguished responsibilities","special treatment and discrimination"; and that substantive rules shall specify fundamental factors of carbon tariff, including types & implementation modes of carbon tariff measures, calculation standards of GHG emission, product coverage, carbon price/duty rate and mitigation phase for developing countries.Section V explores the way of construing multilateral coordinating mechanism for carbon tariff and the role of WTO in response to climate change. The section points out that the current WTO rules are somewhat defective when responding to global environmental problems by asserting that WTO shall reform based on the concept of integration trade with environmental rules. Then the hypothesis on construing multilateral coordinating mechanism for carbon tariff system is proposed accordingly and regarded as the combination of trade rules and emission cutting rules. Finally, innovation of international emission-cutting collaboration ICP is introduced.Section VI explains why China shall select carbon tariff strategies from legal level. This section points out that establishment of carbon taxation and cap-and-trade mechanism can ensure realization of emission cutting goal as well bringing about positive effect for response to carbon tariff.The Conclusion forecasts the influence of carbon tariff on WTO, China and even global society, emphasizes that China shall seize the opportunities hidden behind carbon tariff to realize economic reconstruction and create a responsible superpower image.