Academic journal article Washington International Law Journal

Combating Climate Recalcitrance: Carbon-Related Border Tax Adjustments in a New Era of Global Climate Governance

Academic journal article Washington International Law Journal

Combating Climate Recalcitrance: Carbon-Related Border Tax Adjustments in a New Era of Global Climate Governance

Article excerpt

I. Introduction

There is a perplexing disconnect evidenced in the history of proposals for carbon-related border tax adjustments ("CRBTAs"): border tax adjustments designed to account for the effects of different states' domestic climate policies.1 While a sizable amount of literature has developed over the last two decades discussing the design and legality of CRBTAs2-mostly concluding that it is possible to fashion a measure that passes WTO muster- no states have adopted these measures.3 Proposals for CRBTAs are frequently identified as a means for supplementing proposed unilateral domestic efforts to reduce greenhouse gas emissions in order to address environmental (carbon leakage) or economic (competitiveness) concerns. The association of CRBTAs with unilateral policy creates a nexus between academic and political proposals for CRBTAs and dysfunction in international climate governance negotiations. In the United States, for example, CRBTAs have been a regular feature of proposed climate change legislation, serving as a politically expedient answer to the competitiveness concerns of energyintensive and trade-exposed industries,4 albeit without ultimate legislative success.5

In a world order characterized by sovereign nation-states, an effective multilateral agreement that addresses a problem of global concern like climate change requires a "'thick' global consensus" on the course to be taken.6 Global consensus has proved difficult to achieve, giving rise to arguments that CRBTAs should be used to support unilateral action on climate change. However, the reluctance of states to employ CRBTAs suggests that such measures may be an illusory alternative to consensus-based international agreement. The effective implementation of CRBTAs, or other climatefocused trade measures, require a similar level of global consensus.7

While CRBTA proposals have been common in the context of unilateral climate change policy, they rarely feature in academic or political discussions of multilateral climate action.8 The absence of CRBTA proposals connected to multilateral instruments supports an argument that states view CRBTAs as a second-best option-normatively and practically-that requires overcoming no fewer obstacles than achieving multilateral agreement itself.9 This Article argues that CRBTAs can complement and support a multilateral climate governance regime such as the 2015 Paris Agreement10 when backed by the consensus demonstrated through the adoption of the Agreement. The argument made here diverges from the existing literature. It does so by situating CRBTAs alongside a multilateral climate change agreement in order to support the integrity of the regime created by the agreement itself, rather than to support domestic policy adopted in furtherance of it.11

How can CRBTAs support the Paris Agreement? The answer lies in the soft compliance mechanisms of the Agreement embodying facilitative, non-punitive, and non-adjudicative features.12 The Paris Agreement operates using a "push-pull" system of enforcement. Some states might be unable to achieve their nationally determined contributions ("NDCs") because they lack the financial means or technological resources to do so. Facilitative assistance pulls underperforming states toward their contributions through the targeted provision of resources to states in need. Alternatively, states may show a lack of ambition in setting or meeting their NDCs, despite having the capacity, or historical or moral responsibility to do more. Other parties or non-state actors may form the view that such a state needs to try harder, and may exert political or moral suasion to push the state toward increased ambition. Both elements of the Paris "push-pull" model are, however, soft mechanisms. States do not face hard legal sanctions under the Paris Agreement for failure to comply with their obligations or to achieve their NDCs (which are not legal obligations under the Agreement).

The Paris Agreement's soft enforcement mechanisms are likely to be lacking where a party to the Agreement becomes truly recalcitrant13-that is, unrepentantly breaches its obligations or acts in a way that evidences a clear disregard for, or implicit retraction of, its NDCs through its domestic policy or international actions. …

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