Europe and Climate Change. Towards "Climate-compatible" Commercial Regulation

In the wake of the signing of the Kyoto Protocol in 1997, the campaign against climate change has gradually forced itself on to the agenda in most European countries, and the European Union has set itself precise objectives for reducing greenhouse gas emissions. However, the Kyoto Protocol has not been ratified by all the signatories and some – particularly the United States – do not display the same proactive attitude towards reducing greenhouse gas emissions. As a consequence, the producers in the proactive countries have to respect stricter environmental constraints than their counterparts in the non-proactive ones, and this may adversely affect their competitiveness. The application of the international rules on climate change cannot, in fact, be wholly dissociated from the WTO’s general regime for regulating international trade. As Mehdi Abbas shows here, it is essential to devise a form of trade regulation that is “climate-compatible”. Since, in his opinion, the idea of a carbon tax is not seriously conceivable (like the other fiscal options) within a multilateral framework, the European Union has four possible strategies for developing climate-compatible commercial regulation: commercial liberalization as an incentive to fight climate change; the renewal of existing agreements or the negotiation of new ones; derogation from the multilateral norm; or, lastly, the establishment of a combined form of governance between the WTO and the United Nations Framework Convention on Climate Change. Abbas presents these various options, showing their strengths and weaknesses, and the EU position in respect of them.