In the words of CIDSE: ”In its current form, the chapter on trade and sustainable development is not fit for the centuries of 2021. Their declarations of intent will not be enough to protect biodiversity, combat climate change and ensure that human rights are not sacrificed for profit. 2 Harrison, James and Paulini, Sophia. ”Is the trade and sustainable development chapter of the EU-Mercosur Association Agreement appropriate?” ClientEarth. July 2020. www.documents.clientearth.org/wp-content/uploads/library/2020-07-15-the-trade-and-sustainable-development-chapter-in-the-eu-mercosur-association-agreement-ext-en.pdf (accessed 1. July 2021) This working paper discusses the relationship between the regimes established by the World Trade Organization (WTO) and the United Nations Framework Convention on Climate Change (UNFCCC), ongoing provisions and disputes, the role of regional trade agreements and emerging issues arising from the Paris Agreement. Hoffman, Rhea Tamara and Krajewski, Markus. `Legal opinions and proposals for a possible improvement or renegotiation of the draft EU-Mercosur Association Agreement.` CIDSE. May 2021. www.cidse.org/2021/05/03/legal-opinion-and-proposals-on-eu-mercosur-agreement/ (accessed July 1, 2021) The following excerpt presents the menu of options considered for the regulation of section 6.2.
The text begins by stating in paragraph 29 that ”appropriate adjustments” are necessary if the emission reductions traded come from the scope of a hosts NDC (”the Party applies”). In climate policy discussions, relatively little attention is paid to the architecture of global trade. Bilateral, regional or World Trade Organization (WTO) trade agreements could help achieve climate goals – for example, by eliminating tariffs and harmonizing standards for environmental goods and services, as well as eliminating distorting and ill-conceived subsidies for fossil and agricultural fuels. The EU is also pursuing enforcement measures to address the climate and environmental impacts of cross-border trade independently of one of the EU`s many trade agreements. One policy that is being seriously considered is a Carbon Frontier Adjustment Measure (CBAM). This would tax carbon-intensive goods at the border in order to avoid an emissions ”spill” that would occur if companies moved the production of energy-intensive goods to countries with no carbon prices and comparable environmental standards.8 The EU`s CBAM proposal is a serious attempt to take into account the environmental costs of trade-related carbon emissions, but the unilateral imposition of a carbon cap raises fundamental questions of impartiality. in particular, in the absence of adequate financing or technology transfer to enable developing countries to move to cleaner production methods. Currently, 197 countries – every nation on earth, the last signatory being war-torn Syria – have adopted the Paris Agreement. Of these, 179 have solidified their climate proposals with formal approval – including the US for now.
The only major emitting countries that have not yet officially joined the deal are Russia, Turkey and Iran. This is also true in the U.S. context, where the vast majority of commitments made in recent trade agreements are aimed at limiting ”non-tariff barriers,” including environmental and other protective regulations that can reduce corporate profits. Investor-state dispute settlement (ISDS), a mechanism in many free trade agreements that allows companies to sue governments for public interest laws and override national sovereignty, is an excellent example of a deeply flawed trade policy. It is well known that ISDS has been repeatedly used by companies to overturn climate change policies….