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Introduction: The Impact of the International and European Union Environmental Law on Japanese Basic Environmental Law Read chapter Read first chapter

2016 | OriginalPaper | Chapter

5. Policies Towards Tackling Climate Change and Their Compatibility with the WTO

Author : Kiyotaka Morita

Published in: Contemporary Issues in Environmental Law

Publisher: Springer Japan

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Abstract

Japan and the EU have been implementing domestic measures to tackle climate change. Although measures such as technical standards, eco-labelling and emissions trade systems are expected to contribute towards cutting greenhouse gas emissions, they often evoke discussions regarding their compatibility with WTO regulations. Would an obligation to comply with the energy efficiency standards comprise a technical barrier to trade? Would free allocation of allowances under the emissions trade system be regarded as subsidies under the WTO Agreement on Subsidies and Countervailing Measures? Would border tax adjustments relate to the principle of Most Favoured Nations (MFN) or National Treatment (NT)? This study examines these issues from the perspective of WTO jurisprudence.

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previous chapter The Aarhus Convention and Cases of Non-compliance with Environmental Impact Assessment Requirements: The EU and Japan
next chapter The Principle of Animal Welfare in the EU and Its Influence in Japan and the World
Footnotes
1
IPCC (2014), p. 4.
 
4
Supra., footnote 1 at p. 1.
 
5
Ibid., p. 8.
 
6
Article 3.1.
 
7
Decision 1/CMP.8, Amendment to the Kyoto Protocol pursuant to its Article 3, paragraph 9 (the Doha Amendment), I. para.4.
 
10
Decision 1/CMP.7, Outcome of the work of the Ad Hoc Working Group on Further Commitments for Annex I Parties under the Kyoto Protocol at its sixteenth session, p. 4.
 
11
Ibid., p. 7 at footnote q.
 
13
Department for Communities and Local Government, Proposed changes to Part L (Conservation of fuel and power) of the Building Regulations 2012/13 in England, Consultation stage impact assessment (January 2012), para 1.3.
 
15
Article 78.1 and 78.2 of the Energy Conservation Act.
 
16
Article 79.1 of the Energy Conservation Act.
 
17
Article 79.2 of the Energy Conservation Act.
 
18
Article 79.3 of the Energy Conservation Act.
 
19
Article 21 of the Enforcement Ordinance of the Energy Conservation Act.
 
20
Ministry of Economy, Trade and Industry (2010), p. 9.
 
21
United States: Certain Country of Origin Labeling (COOL) Requirements, Report of the Panel, WT/DS384/R, WT/DS386/R, November 18, 2011.
 
22
Ibid., para. 7.554.
 
23
Ibid., para. 7.555.
 
24
Ibid., para. 7.556.
 
25
Ibid., para. 7.557.
 
26
Charnovitz S (2003), p. 149.
 
27
Infra, footnote 94.
 
28
United States: Measures Concerning the Importation, Marketing and Sale of Tuna and Tuna Products, Report of the Panel, WT/DS381/R, September 15, 2011, para. 7.388.
 
29
Ibid.
 
30
Ibid.
 
31
United States: Measures Concerning the Importation, Marketing and Sale of Tuna and Tuna Products, Report of the Appellate Body, WT/DS381/AB/R, 16 May 2012, para. 330.
 
32
Committee on Technical Barriers to Trade, Specific Trade Concerns Related to Labelling Brought to the Attention of the Committee Since 1995, Note by the Secretariat, G/TBT/W/184, 4 October 2002, Item 18, pp. 13–14.
 
33
Charnovitz (2003), p. 151.
 
34
Intervention by the representative of Canada at the Committee on Technical Barriers to Trade at Minutes of the Meeting Held on 1 March 1996, G/TBT/M/4, 10 June 1996, para. 80.
 
36
Regulation (EU) No 995/2010 of the European Parliament and of the Council of 20 October 2010 laying down the obligations of operators who place timber and timber products on the market.
 
37
Ibid., Article 4.1.
 
38
Ibid., Article 2 (g) (emphasis added).
 
39
Ibid., Article 4.2.
 
40
Ministry of Economy, Trade and Industry (2010), p. 22.
 
41
Keidanren (2013), p. 1.
 
42
Ibid., p. 2.
 
43
Ibid., p. 3.
 
44
Ibid.
 
45
Keidanren (2014).
 
46
Ibid. (418.84 million t-CO2 in 2005, 395.60 million t-CO2 in 2013).
 
47
Ibid. (82.52 million t-CO2 in 2005, 88.67 million t-CO2 in 2013).
 
48
Ibid. (90.58 million t-CO2 in 2005, 83.28 million t-CO2 in 2013).
 
49
Yamaguchi M (2012), p. 152.
 
50
This section has been cited from Morita K (2015) with revisions.
 
51
Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a scheme for greenhouse gas emission allowance trading within the Community and amending Council Directive 96/61/EC.
 
52
Ibid., Article 9.1.
 
53
Ibid., Article 10.
 
54
Ibid., Article 16.3.
 
55
Ibid., Article 16.4.
 
56
Petsonk A (1999), pp. 208–209.
 
57
Ibid.
 
58
United States: Preliminary Determinations with Respect to Certain Softwood Lumber from Canada, Report of the Panel, WT/DS236/R, 1 November, 2002, paras. 7.17–7.29.
 
59
EU Commission letter to Denmark and the UK on 12 April 2000 and 28 November 2001, State Aid Cases N653/99 and N416/2001.
 
60
Ibid. See also Weishaar S (2006), pp. 15–23.
 
61
Lodefalk M and Storey M (2005), p. 43.
 
62
For example, ‘as such’ and ‘as applied’ was an issue in the Canada–Export Credits and Loan Guarantees for Regional Aircraft, Report of the Panel, WT/DS222/R, 28 January, 2002. In this case, it was disputed whether or not the use of ‘EDC Canada Account’, an account of the Canadian 100 % state owned company, for supporting an aircraft industry would be inconsistent with the SCM Agreement. The WTO Panel ruled that the EDC Canada Account as such is not inconsistent with the SCM Agreement because the conditions for use of the Account did not demonstrate the existence of mandatory subsidisation (paras. 7.95–7.97). However, as applied to a specific case of the Account financing to Air Wisconsin, the Panel contended that it is a subsidy contingent upon export performance, since Canada has failed to show that it is in conformity with the interest rate provisions of the OECD Arrangement (paras. 7.180–7.182). In the same manner, the ‘cap and trade’ as such would not be WTO incompatible because surplus allowances are not mandatory. It would be considered WTO incompatible only when surplus allowances are given to a certain industrial sector.
 
63
Canada: Measures Affecting the Export of Civilian Aircraft, Report of the Appellate Body, WT/DS70/AB/R, August 2, 1999, para. 173.
 
64
European Communities and Certain Member States: Measures Affecting Trade in Large Civil Aircraft, Report of the Appellate Body, WT/DS316/AB/R, 18 May 2011, para. 1052.
 
65
DEFRA (2005), p. 20.
 
66
DEFRA (2007), p. 22.
 
68
Ibid., p. 2.
 
69
Ibid., p. 3.
 
70
Ibid., p. 4.
 
71
Ibid., pp. 3–4.
 
72
Sixth National Communication and First Biennial Report from the European Union under the UN Framework Convention on Climate Change, SWD (2014) 1 final, Brussels, 10. 1. 2014, p. 27.
 
73
Keidanren (2007), Attachment 2, On Emissions Trading Systems.
 
74
Keidanren (2012).
 
75
Japan has held consultations with developing countries since 2011 and signed a bilateral document with Mongolia, Bangladesh, Ethiopia, Kenya, Maldives, Vietnam, Lao PDR, Indonesia, Costa Rica, Palau, Cambodia and Mexico. See Recent Development of the Joint Crediting Mechanism (JCM), October 2014, Government of Japan, p. 11.
 
76
Decision 1/CP.18, Agreed outcome pursuant to the Bali Action Plan, FCCC/CP/2012/8/Add.1, para. 41.
 
77
Supra., footnote 75 at p. 5.
 
78
Ibid., p. 7.
 
79
Ibid., p. 6.
 
80
WTO Rules and Procedures and Their Implication for the Kyoto Protocol, A Discussion Paper Prepared by Timothy E. Deal, Senior Vice President, United States Council for International Business, p. 3.
 
81
Ibid.
 
82
Ibid.
 
83
BDI (2008).
 
84
Businesseurope (2008), p. 2.
 
85
Footnote 80 at p. 4.
 
86
Takamura Y and Kameyama Y (2009), p. 21.
 
87
Ibid.
 
88
Ibid.
 
89
Ibid.
 
90
Border Tax Adjustments, Report of the Working Party adopted on 2 December 1970 (L/3464), para. 14.
 
91
United State s- Restrictions on Imports of Tuna, Panel Report, BISD 39S/155 (3 September 1991).
 
92
Ibid., para. 5.11.
 
93
Ibid., para. 5.14.
 
94
United States – Taxes on Petroleum and Certain Imported Substances, Panel Report, BISD 34S/136 (June 1987), para. 5.2.7–5.2.8.
 
95
According to Charnovitz, this information was formerly available on the WTO website at http://​www.​wto.​org/​english/​tratop_​e/​cte03_​e.​htm. However, it is not accessible as of today. See Charnovitz S (2003), pp. 147–148.
 
96
Korea – Measure Affecting Imports of Fresh, Chilled and Frozen Beef, Report of the Appellate Body, WT/DS/161/AB/R, WT/DS/169/AB/R, December 10 2000.
 
97
Ibid., para. 161.
 
98
Ibid., para. 164.
 
99
China – Measures Related to the Exportation of Various Raw Materials, Reports of the Panel, WT/DS394/R, WT/DS395/R, WT/DS398/R, 5 July 2011.
 
100
Ibid., para. 7.480.
 
101
Ibid., para. 7.502.
 
102
Ibid., para. 7.511.
 
103
Ibid., para. 7.516.
 
104
United States – Import Prohibition of Certain Shrimp and Shrimp Products, Report of the Appellate Body, WT/DS/58/AB/R, October 12 1998.
 
105
Ibid., para. 128.
 
106
Ibid., para. 132.
 
107
IPCC (2014), p. 10.
 
108
Footnote 104, para. 135.
 
109
China-Measures Related to the Exportation of Rare Earths, Tungsten and Molybdenum, Report of the Appellate Body, August 7 2014, WT/DS431/AB/R, WT/DS432/AB/R, WT/DS433/AB/R, para. 5.88.
 
110
Ibid., para. 5.90.
 
Literature
Charnovitz S (2003) Trade and climate: potential conflicts and synergies. In: Beyond Kyoto: advancing the international effort against climate change, Pew Center on Global Climate Change. pp 141–170
Lodefalk M, Storey M (2005) Climate measures and WTO rules on subsidies. J World Trade 39(1):23–44
Morita K (2015) Legal aspects of the emissions trading scheme based on ‘Cap and Trade’. Hitotsubashi J Law Polit 43:75–84
Petsonk A (1999) The Kyoto protocol and the WTO: integrating greenhouse gas emissions allowance trading into the global marketplace. Duke Environ Law Policy Forum 10:185–220
Takamura Y, Kameyama (2009) Border adjustments in Japanese climate policy. Climate strategies working paper
Yamaguchi M (2012) Climate change mitigation: a balanced approach to climate change. Springer-Verlag London
Weishaar S (2006) The European CO2 emission trading system and state aid–an assessment of the grandfathering allocation method and the performance standard rate system–, University of Maastricht
Metadata
Title
Policies Towards Tackling Climate Change and Their Compatibility with the WTO
Author
Kiyotaka Morita
Copyright Year
2016
Publisher
Springer Japan
Book
Contemporary Issues in Environmental Law

Print ISBN: 978-4-431-55434-9

Electronic ISBN: 978-4-431-55435-6

Copyright Year: 2016

DOI
https://doi.org/10.1007/978-4-431-55435-6_5