Cooperation Without Convergence: Border Carbon Adjustment and Heterogeneity of Climate Actions
Master of Laws
Border Carbon Adjustment measures (“BCAs”) were originally conceived to help solve a problem that arises when countries ask firms to internalize the costs of environmental depredation in an open economy. Environmental regulation raises costs to domestic producers who feel and are — both are relevant — disadvantaged vis-à-vis their foreign competitors subject to lower regulatory costs, in ways that impact economic competitiveness but also the effectiveness of the regulation itself, to the extent it is directed at a ‘global commons’ problem such as reducing greenhouse gas (“GHG”) emissions in an attempt to mitigate climate change. However, BCAs create issues of their own. Among other problems, they may prejudge the recognition of climate actions and impose trade barriers based on that unilateral valuation. This in turn may alienate trading countries subject to such measures, leading to a logic of tit-for-tat retaliation. The disruption from environmental border measures can be exacerbated by the design and features of specific BCAs, while their level of trade-restrictiveness could be measured through the application of traditional international trade disciplines. In view of this, this paper examines a possible way forward that combines cooperation on trade policy without convergence on climate action — the ‘climate mutual recognition’ approach — concluding that it bears the potential to address some of the most problematic impacts of unilateral BCAs while accommodating the legal and political constraints that define the current state of climate and trade governance.
Environmental Law | International Law | Law
Jiminez, Lucas Moreira, "Cooperation Without Convergence: Border Carbon Adjustment and Heterogeneity of Climate Actions" (2022). LL.M. Essays & Theses. 6.