Assisting the Diffusion of Low-Carbon Technology through Emission Pricing

This is the first of the two chapters that take the discussions to the level of domestic trade policy measures for lowcarbon technology (lct) diffusion. Following the outlines of the proposed trade cooperation narrative laid out in the previous chapter, the goal here is twofold. One is to take the application of the narrative a step further by looking into a particular facilitative trade policy action in the backdrop of the existing framework of rules. Such an exercise would contribute by highlighting the bottlenecks where climate mitigation motivated measures may come to conflict with trade rules. The other goal is to identify the ways the proposed doctrine of Common Concern can ease or tackle those challenges. In substantive terms, the present chapter would call for pricing of ghg emissions domestically and also for imposing similar regulation upon imports (i.e. border adjustment). It would also propose that additional revenue gained from carbon pricing of imports be reverted to the production sources, the developing countries in particular, as technology upgradation support. The driving hypothesis here is that through the pricing of ghg emissions, it is possible to create a business environment that renders lowemission production and processing lucrative. To establish that hypothesis, the first section supplies a factual background to carbon pricing, as well as describes the key components of the proposed pricing approach. Thereafter, the second and the third section discuss the thorny issues with respect to wto rules in this regard. The following section introduces a counterfactual position, proposing a harmonisation endeavour under the rubric of Common Concern of Humankind. The concluding part sums up the analysis and the key findings therefrom.