Trade Measures to Address Climate Change: Territory and Extraterritoriality

Abstract

States can reduce global greenhouse gas emissions through trade measures such as energy subsidies, labelling or certification requirements or tax adjustments. These measures modify production or consumption behaviour without regard to territorial borders. Yet territory is a significant concept for international efforts at climate change mitigation: the UNFCCC Paris Agreement, for example, relies on nationally determined contributions in the context of common but differentiated responsibilities. Moreover, public international law doctrine on extraterritorial jurisdiction may be said to require a ‘territorial nexus’ between the object of the trade measure and the state imposing the measure. Should the state concentrate on activities within its borders rather than shifting the burden of climate change mitigation to other countries through trade measures? The issue of historical responsibilities for climate change becomes even more fraught if the adverse effects of trade measures are felt disproportionately by indigenous peoples and other marginalised communities within states. This chapter reviews trade law and other jurisprudence and argues that trade measures addressing climate change are unlikely to enliven — let alone violate — public international law rules on extraterritorial jurisdiction. In the alternative, it argues that if a nexus is required, it is relatively easy to satisfy. Neither of these findings, however, dispose of the issue of the lack of parity between and within states with respect to historic contributions to the cause of climate change and vulnerabilities to its impacts. This chapter thus demonstrates the importance of an understanding of how territory — and jurisdiction — operate in the context of trade measures to address climate change, and how this understanding points to a need to be aware of the status and conditions of people within the territory of affected trading partners.