Emissions Trading Schemes under International Economic Law

The announcement by China that it will implement a national emissions trading scheme confirms the status of this instrument as the pre-eminent policy choice for mitigating climate change. China will join the dozens of existing and emerging schemes around the world - from the EU to California, South Korea to New Zealand - that use carbon units (otherwise known as emissions permits or carbon credits) to trade in greenhouse gas emissions in a multi-billion dollar global carbon market.
However, to date, there has been no consensus about this pre-eminent policy instrument being regulated by international economic law through the World Trade Organization, international investment agreements, and free trade agreements. Munro addresses this issue by evaluating whether carbon units qualify as 'goods', 'services', 'financial services', and 'investments' under international economic law and showing how international economic law applies to emissions trading scheme in diverse and unexpected ways. Further, by engaging in a comparative assessment of schemes around the world, his book illustrates how and why all emissions trading schemes engage in various forms of violations of international economic law which would not, in most instances, be justified by environmental or other exceptions. In doing so, he demonstrates how such schemes can be designed or reformed in ways to ensure their future compliance.

James Munro has worked as a lawyer at the World Trade Organization on international trade litigation at both the panel and appellate stages. He has also practised in the fields of international trade and investment law for the Australian Government, including advising on domestic compliance with international economic law, free trade agreements, trade remedies investigations, and serving as negotiator and legal counsel on various trade and environment treaties. Munro has published a number of peer-reviewed contributions on subjects relating to international trade and investment law, and holds a PhD from the University of Melbourne in this field. It should be noted that this present contribution does not necessarily reflect the views of any current or former employer.

- 1: Introduction - I: CONCEPTUAL FOUNDATIONS: EMISSIONS TRADING SCHEMES AND INTERNATIONAL LAW - 2: Applying International Economic Law to Emissions Trading Schemes: Treaty Interpretation and the Paris Agreement - 3: Carbon Units and Emissions Trading Schemes - II: CHARACTERISATION OF CARBON UNITS UNDER INTERNATIONAL ECONOMIC LAW - 4: International Trade in Carbon Units under GATT 1994 and Free Trade Agreements - 5: International Trade in Carbon Units under GATS and Free Trade Agreements - 6: International Trade in Carbon Units and Financial Services - 7: Carbon Units as 'Investments' under International Investment Agreements - III: CONSISTENCY OF EMISSIONS TRADING SCHEMES WITH INTERNATIONAL ECONOMIC LAW - 8: A Taxonomy of Prima Facie Violations of International Economic Law - 9: Exceptions - 10: Conclusion