The Legality of the European Union’s Carbon Border Adjustment Mechanism and the Limitations of World Trade Organization Rules on Effective Climate Action

Author

Delaney Smith, University of MississippiFollow

Date of Award

Spring 4-29-2022

Document Type

Undergraduate Thesis

Department

Croft Institute for International Studies

First Advisor

Antonia Eliason

Second Advisor

Kees Gispen

Third Advisor

Oliver Dinius

Relational Format

Dissertation/Thesis

Abstract

In July 2021, the European Union proposed the creation of a carbon border adjustment mechanism, a trade mechanism that would levy a carbon price against imported goods. This mechanism, the first of its kind, has the potential to address weaknesses in the EU’s existing domestic cap and trade system and create a financial incentive for other nations to reduce their carbon emissions. However, legal experts have raised concerns that this mechanism may violate the rules of the World Trade Organization. If another member state raises a complaint against the measure, the European Union will be forced to navigate the World Trade Organization’s dispute settlement process to determine the legality of the measure. By examining similar trade measures defended under Article XX of the General Agreement on Tariffs and Trade, this thesis explores how such a dispute might play out. Ultimately, this thesis asks the question of whether the rules of the World Trade Organization are too narrow to allow for the kinds of trade measures needed to drastically decrease global carbon emissions and prevent further catastrophic climate change.

Recommended Citation

Smith, Delaney, "The Legality of the European Union’s Carbon Border Adjustment Mechanism and the Limitations of World Trade Organization Rules on Effective Climate Action" (2022). Honors Theses. 2720.
https://egrove.olemiss.edu/hon_thesis/2720

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