W8 - Environmental law beyond borders Flashcards
(7 cards)
How does trade and trade policy affect the environment, how does environmental change and policy affect trade?
Directly via emissions due to transport of goods.
Indirectly via
1) Scale effect - More economic activity increases pollution
2) Composition effect - Sectoral specialisation eg. mineral extraction influences pollution levels
3) Standards/ California effect - a influential region imposing higher standards can diffuse to other places and reduce pollution
Environmental change can affect trade eg. new artic shipping routes due to ice melting
Environmental policy such as CBAM/ Subsidies for wind turbines impacts trade, thus the environment
How does EU environmental measures effect non EU countries? “The Brussels Effect” - What are the 3 ways this is achieved?
Companies want to maintain access to the large EU market, so abide by EU’s regulation and standards.
1) Imposing EU law directly onto foreign countries in exchange for access
2) EU law imposed on domestic firms requiring them to intervene in their supply chains, even in other countries. Domestic apply pressure on their suppliers to abide.
3) EU encourages companies to abide by private standards eg. made by NGO’s, so firms voluntarily abide by them.
What is CBAM, its aims in the EU, and its transition to be adopted in the UK? Does it affect exports too? What is the geographic and sectoral scope in the EU? How does it affect the free allocation of permits and why ?
Puts a fair price on carbon used to produce the most emission heavy imports.
Aims
1) Prevent carbon leakage
2) Level the playing field between ETS members and non - also raises revenue
3) Incentives trade partners to strengthen their climate efforts
Only imports although export rebates to abide by aim 2) is being reviewed.
Scope
geography - all countries not in the EEA or the EU ETS
Sector - emission intensive industries like steel
Phasing out free allocation of permits as CBAM phased in. Free allocation were given to reduce the risk of carbon leakage and help keep their international competitiveness, but CBAM addresses this, reducing free allocation means no double protection of EU ETS countries. CBAM prices carbon via the ETS price, so fluctuates.
UK CBAM coming soon, has slightly smaller sectoral scope, minimum threshold of 50k/year to not affect small quantities.
Give an example of when there was severe backlash to the EU’s green measures due it its beyond borders effects. Was this measure Extraterritoriality or territorial extension?
When the EU included aviation emissions in its ETS. Challenged by non EU airlines in the CJEU, but CJEU backed the EU, saying it’s in line with the principle of territoriality as the flights were landing/taking off from the EU, and the measure was to improve international environmental progress. China cancelled Airbus orders, the EU caved under pressure and only included domestic flights.
Extraterritoriality: This is when a country’s law is applied to something that has no connection at all to that country’s territory.
Territorial Extension: This is when a country’s law applies because there is a connection to that country’s territory, but the law makes you consider things that happened outside the country
Fits territorial extension, as does CBAM as it is regarding EU territory but takes into account circumstances outside of it.
Is CBAM legal, fair and effective?
Legal - CBAM complies with WTO law but has been argued to be incompatible with international climate change law as can be seen as infringing on principle of CBDR
Fair - CBAM doesn’t exempt least developed countries, can lead to green imperialism where rich environmental rules disadvantage developing nations.
Effective - ETS hasn’t caused carbon leakage yet so CBAM not effective in that sense. Although it could cause that issue, and even if not, still incentivises foreign firms to drive decarbonisation efforts.
Give an example of a trade policy that protects the environment, is it enforced?
Environmental provisions which are in Trade and sustainable development (TSD) chapters in Free trade agreements (FTA’s) such as requiring compliance with inter/national laws, though not always enforced (The Achilles’ heel). EU - New Zealand says each party shall implement the UNFCCC and the Paris Agreement. This agreement allows for economic sanctions if Paris is violated.
