WTO CTE Considers Carbon Border Adjustments and Carbon Footprint Schemes

7 July 2011: The World Trade Organization's (WTO) Committee on Trade and Environment (CTE) met on 6 July 2011 to continue considering the consistency of carbon footprint schemes on international trade rules, as well as a proposal by Singapore related to carbon-related border tax adjustments (WT/CTE/W/248).

The exchange of information on eco-labelling and carbon footprinting schemes continued with Chile introducing a study on carbon footprint in Chile, suggesting that the production of processed food was the most carbon intensive part of the life cycle and not its international transport.  Members also raised a number of concerns related to the trade impact of carbon footprint schemes, including: the importance of evaluating the impact on market access of carbon footprinting and labelling schemes; the lack of transparency; the proliferation of carbon footprinting standards and labelling and the lack of international harmonization; the importance of capacity building for developing countries, including for small and medium-sized enterprises; and the lack of scientific basis for the calculation of carbon content.

Regarding carbon border adjustment (CBA) measures, members discussed a proposal by Singapore to request the Secretariat to prepare a compilation of existing studies on: the role that CBTAs can play in addressing competitiveness and leakage concerns with as minimal economic and trade impacts as possible; how CBTAs can be applied in a WTO consistent manner; and the usefulness of developing a set of multilaterally agreed guidelines to pre-empt the abuse of CBTAs. This proposal was not adopted as, reportedly, some members considered there is no room for BTAs under the WTO. [IISD RS Sources] [ Bridges Weekly Trade News Digest]