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Unilateral Measures and State Jurisdiction

There are outstanding issues in international law regarding the extent to which States have jurisdiction to regulate transboundary and global environmental issues unilaterally.

Principle 12 of the Rio Declaration addresses this issue as follows:

States should cooperate to promote a supportive and open international economic system that would lead to economic growth and sustainable development in all countries, to better address the problems of environmental degradation. Trade policy measures for environmental purposes should not constitute a means of arbitrary or unjustifiable discrimination or a disguised restriction on international trade. Unilateral actions to deal with environmental challenges outside the jurisdiction of the importing country should be avoided. Environmental measures addressing transboundary or global environmental problems should, as far as possible, be based on an international consensus. (Emphasis added.)

The Rio Declaration thus expresses a preference for international consensus over unilateral actions, but without prohibiting unilateral actions.

UNFCCC Article 3(5) does not rule out the use of unilateral measures, as long as they comply with some of the language of GATT Article XX: “Measures taken to combat climate change, including unilateral ones, should not constitute a means of arbitrary or unjustifiable discrimination or a disguised restriction on international trade” (emphasis added). Paragraph (6) of the Doha Ministerial Declaration also implicitly recognizes a right to take unilateral measures, in accordance with GATT Article XX:

We recognize that under WTO rules no country should be prevented from taking measures for the protection of human, animal or plant life or health, or of the environment at the levels it considers appropriate, subject to the requirement that they are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail, or a disguised restriction on international trade, and are otherwise in accordance with the provisions of the WTO Agreements. (Emphasis added.)

There are two cases that support the use of unilateral measures to address climate change. In one, the European Court ofJustice considered the right ofthe EU to use a unilateral climate change measure in light of the Kyoto Protocol and customary international law. In the other, the WTO Appellate Body considered the right of the United States to use a unilateral environmental protection measure in light of GATT Article XX.

The ECJ case of EU Directive 2008/101 (Aviation Directive) considers the validity of a unilateral climate change measure. Kyoto Article 2(2) requires Annex I parties to “pursue limitation or reduction of emissions of greenhouse gases... from aviation . . . bunker fuels, working through the International Civil Aviation Organization.... ” After insufficient progress on limiting emissions from airlines under Kyoto Protocol Article 2(2), the EU acted unilaterally and applied the directive to both EU and non-EU airlines.

China and India prohibited their airlines from complying with the EU Aviation scheme, arguing that it violates the UNFCCC principle of common but differentiated responsibility. Airlines challenged the law before the UK High Court, which referred several legal issues to the ECJ. The ECJ ruled that the Kyoto Protocol does not provide a legal basis for challenging EU action and it does not breach customary international law principles of State sovereignty because it applies only to aircraft that choose to operate in EU airspace.[1]

Treaties concluded by the EU prevail over EU acts, but the provisions of the treaty must appear, as regards their content, to be unconditional and sufficiently precise. The Kyoto Protocol allows certain parties undergoing the process of transition to a market economy a degree of flexibility in the implementation of their commitments. The protocol also allows certain parties to meet their reduction commitments collectively. Finally, the Conference of the Parties is responsible for approving procedures and mechanisms to determine and to address cases of noncompliance with the provisions of the protocol. Thus, in the opinion of the ECJ, even though the Kyoto Protocol imposes quantified greenhouse gas reduction commitments for 2008 to 2012, the parties to the Protocol may comply with their obligations in the manner and at the speed upon which they agree. Article 2(2) of the Kyoto Protocol provides that the parties are to pursue limitation or reduction of emissions of certain greenhouse gases from aviation bunker fuels, working through the International Civil Aviation Organization. The ECJ found that this provision, as regards its content, cannot be considered to be unconditional and sufficiently precise so as to confer on individuals the right to rely on it in legal proceedings in order to contest the validity of the Aviation Directive.[2] A similar conclusion could follow from an analysis of the relationship between the provisions of the Kyoto Protocol and WTO law; the conditionality and imprecision of the former means that it would be unlikely to prevail over more concrete and precise WTO obligations.[3]

When the European Union adopts an act, it is bound to observe international law, including customary international law. The ECJ concluded that three of the principles to which the referring court makes reference are recognized as forming part of customary international law: (1) that each State has complete and exclusive sovereignty over its airspace; (2) that no State may validly purport to subject any part of the high seas to its sovereignty; and (3) freedom to fly over the high seas. However, the ECJ determined that a fourth principle, that aircraft flying over the high seas are subject to the exclusive jurisdiction of the State in which they are registered, did not constitute customary international law and therefore could not affect the validity of the Aviation Directive. With respect to the first three principles, the ECJ had to determine whether the EU had competence to adopt Directive 2008/101, since it applies to aircraft operators of third States whose flights arriving in and departing from the EU are carried out in part over the high seas and over the third States’ territory. However, since a principle of customary international law does not have the same degree of precision as a treaty provision, judicial review must be limited to the question whether, in adopting the act in question, the EU institutions made manifest errors of assessment concerning the conditions for applying those principles. Moreover, the Aviation Directive had to be interpreted, and its scope delimited, in light of the relevant rules of international law. Thus, the Aviation Directive could not apply as such to aircraft registered in third States that are flying over third States or the high seas. However, EU legislation may be applied to an aircraft operator when its aircraft is physically in the territory of one of the Member States. Thus, the ECJ held that the Aviation Directive does not infringe the principle of territoriality or sovereignty, since the aircraft are subject on that basis to the jurisdiction of the EU. As for the fact that the operator of an aircraft in such a situation is required to surrender emissions allowances calculated in light of the whole of the international flight, the EU legislature may in principle choose to permit a commercial activity to be carried out in the territory of the EU only on condition that operators comply with the criteria that have been established by the EU and are designed to fulfill the environmental protection objectives which it has set for itself, in particular where those objectives follow from an international agreement to which the EU is a signatory, such as the UNFCCC and the Kyoto Protocol. Finally, the ECJ held that EU law can apply to matters contributing to the pollution of the air, sea, or land territory of the Member States even where they originate in an event which occurs partly outside EU territory, citing its past decisions regarding the application of competition law and regarding hydrocarbons accidentally spilled beyond a Member State’s territorial sea.[4]

One aspect of the ECJ ruling is troubling. Article 2(2) of the Kyoto Protocol also requires Annex I parties to pursue reduction of emissions of greenhouse gases to marine bunker fuels, working through the International Maritime Organization. The ECJ recognized the principle of customary international law that a vessel on the high seas is in principle governed only by the law of its flag, but held that this does not apply by analogy to aircraft flying over the high seas.[5] This reasoning is rather incongruent, since it means that air and marine transport would not be addressed in the same manner in a unilateral measure, even though they are addressed in the same manner in the Kyoto Protocol.

However, the ECJ ruling on the principle of territoriality and sovereignty is consistent with the approach of the Appellate Body to a similar argument in USShrimp and US—Shrimp (Article 21.5Malaysia).[6] The WTO Appellate Body found that, in certain circumstances, a Member can justify unilateral recourse to trade restrictions to induce changes in the environmental practices of other Members. The WTO Appellate Body interpreted GATT Article XX(g) to permit the United States to unilaterally impose trade barriers to pressure Malaysia to change its domestic environmental regime for the protection of sea turtles. Like the Aviation Directive case, the Shrimp case raises important questions regarding the relationship between trade law, environmental law, and the general principles of public international law. As such, these cases have important implications not only in the field of trade and environment, but more generally in the realm of public international law and global governance.

The United States banned shrimp imports from WTO members that did not comply with American legal requirements regarding the protection of sea turtles from incidental death in the shrimp harvesting process. The United States negotiated and concluded a regional international agreement on sea turtle protection and conservation with some countries in the Americas, but not other countries that were affected by the trade ban. The United States gave countries that were parties to the Inter-American Convention three years to introduce “turtle exclusion devices,” while others were given only four months. This was not part of the original design of the measures, but resulted from a United States court order requiring the United States administration to apply the import ban to the entire world when it was only being applied in the Americas.[7] However, the Appellate Body held that the United States government was responsible for meeting its WTO obligations and it was no excuse under international law that the action was required by the courts.

All species of turtles involved were listed as being under threat of extinction under the Convention on International Trade in Endangered Species of Wild

Fauna and Flora (CITES)[8] Appendix I, and occurred in American territorial waters as part of their migratory route. However, the American measures were not taken under CITES or any other multilateral environmental agreement. The Appellate Body rejected arguments that unilateral measures could not be included under Article XX(g), stating:

It appears to us... that conditioning access to a Member’s domestic market on whether exporting Members comply with, or adopt, a policy or policies unilaterally prescribed by the importing Member may, to some degree, be a common aspect of measures falling within the scope of one or another of the exceptions (a) to (j) of Article XX.[9]

The Appellate Body held that the measure met the requirements of Article XX(g), but not the chapeau. The Appellate Body emphasized a preference for multilateral solutions to international environmental problems, citing both WTO and other international instruments to that effect. It noted that the protection and conservation of migratory species demands concerted and cooperative efforts on the part of many countries. It cited the references in the Decision on Trade and Environment to Principle 12 of the Rio Declaration on Environment and Development and Agenda 21 as proof that the WTO has recognized both the need for such cooperative efforts and the inappropriateness of unilateral action in dealing with extraterritorial aspects of international environmental problems.

However, in Shrimp 21.5, the Appellate Body said:

Requiring that a multilateral agreement be concluded by the United States in order to avoid “arbitrary and unjustifiable discrimination” in applying its measure would mean that any country party to the negotiations with the United States, whether a WTO Member or not, would have, in effect, a veto over whether the United States could fulfil its WTO obligations. Such a requirement would not be reasonable.

Principle 12 of the Rio Declaration . . . states, in part, that “[e]nvironmental measures addressing transboundary or global environmental problems should, as far as possible, be based on international consensus.” Clearly, and “as far as possible,” a multilateral approach is strongly preferred. Yet it is one thing to prefer a multilateral approach in the application of a measure that is provisionally justified under one of the subparagraphs of Article XX...; it is another to require the conclusion of a multilateral agreement as a condition of avoiding ‘arbitrary and unjustifiable discrimination’ under the chapeau... .We see, in this case, no such requirement.[10]

Thus, while the Article XX chapeau required the United States to make good faith efforts to reach international agreements before imposing a unilateral import ban to further international environmental objectives, it could not be required to succeed. Certainly, if trade restrictions are to be permitted for the purpose of persuading other countries to participate in multilateral environmental protection efforts, this is a logical result. Moreover, the wording of the Rio Declaration (“as far as possible”) clearly leaves open the possibility that unilateral measures may be needed in some circumstances.

The Appellate Body held that there was a sufficient jurisdictional nexus between the United States and the turtles for the purposes of Article XX(g). All of the species occur in waters over which the United States has jurisdiction, even though they migrate across national borders and international waters. In this regard, the Appellate Body’s reasoning resembles that of the ECJ in the Aviation Directive case. At the same time, however, the Appellate Body expressly declined to decide whether there is an implied jurisdictional limitation in Article XX(g) and, if so, the nature or extent of that limitation. The Appellate Body recognized that a State has a legitimate interest in the protection of migratory species that occur within its territory.

There is an important distinction to be made regarding environmental concerns based on their geographic connection with the importing country. In international environmental law, both Agenda 21 and the Rio Declaration call upon countries to avoid “unilateral action to deal with environmental challenges outside the jurisdiction of the importing country” (emphasis added). It is only with respect to “environmental measures addressing transboundary or global environmental problems” that countries are urged, “as far as possible,” to base their actions on international consensus. The phrase “as far as possible,” leaves an opening for a country to take unilateral action where efforts at international negotiation fail, but only with respect to transboundary or global environmental problems.[11]

Under customary international law, a State acts in excess of its own jurisdiction when its measures purport to regulate acts which are done outside its territorial jurisdiction by persons who are not its own nationals, and which have no, or no substantial, effect within its territorial jurisdiction.[12] The territorial foundation of jurisdiction fails to resolve some modern jurisdictional conflicts (for example, the management of migratory species). Thus, the territorial basis for jurisdiction is subject to a developing principle of substantial and genuine connection between the subject matter of jurisdiction, on the one hand, and the territorial base and reasonable interests of the jurisdiction sought to be exercised, on the other.[13]

In Shrimp, the holding that the United States had a sufficient “jurisdictional nexus” for its measure to qualify for provisional justification under GATT Article XX(g) is consistent with customary international law insofar as harm to the turtles would have an effect within its territorial jurisdiction. This holding is also consistent with international environmental law in that the conservation of sea turtles is a transboundary environmental problem. However, the ruling might be viewed as inconsistent with public international law to the extent that the American measure purports to regulate acts which are done outside its territorial jurisdiction by persons who are not its own nationals.

The geographic location of the resource and the legitimacy of the policy goal (which, in the Shrimp case, is reflected in the consensus that it is necessary to prevent the extinction of species) are factors that should be taken into account in determining whether the subject matter qualifies for provisional justification under Article XX(g). The question is whether a geographic connection between the resource and the enacting country is necessary or whether a less proximate connection should suffice. The governing principle ofcustomary international law is that a State acts in excess of its own jurisdiction when its measures purport to regulate acts which are done outside its territorial jurisdiction by persons who are not its own nationals and which have no, or no substantial, effect within its territorial jurisdiction. GATT should be interpreted in a manner that is consistent with this principle, which means that some degree of territorial connection to the resource is necessary for a State to unilaterally regulate activities concerning that resource.

The American measures in the Shrimp cases were aimed at a transboundary environmental issue in which the United States had a territorial connection. Such cases should be relatively easy to identify. However, distinguishing between “global” and “extraterritorial” environmental problems is more difficult. Where the problem occurs entirely outside the territory of the importing country, it would appear to be extraterritorial. However, if one views the global ecosystem as interconnected, then problems that appear to be extraterritorial at first glance could be characterized as global. For example, does the United States or Europe have a jurisdictional nexus with respect to the Amazon because it contains a large percentage of global biodiversity and absorbs a significant percentage of global carbon dioxide emissions? This is not simply a legal question, but also a question of fact that requires scientific analysis. Where there exists a multilateral environmental agreement that indicates widespread international consensus regarding the global importance of a particular environmental problem, such as climate change, that may provide evidence that the issue is global rather than local and thus raise a rebuttable presumption regarding the categorization of the issue.

The existence of widespread consensus regarding the measures that are required to achieve the policy goal (as opposed to consensus regarding the legitimacy of the goal itself) is a factor to be considered in the Article XX chapeau analysis, since this is an implementation issue. The question is, how effective must the chosen measure be in order to pass the test? Where there is consensus, the measure is, in essence, deemed to be effective. However, the issue of the effectiveness of a measure in achieving the stated policy goal would have to be considered independently where such consensus is absent.

The Rio Declaration suggests that unilateral measures should only be used as a last resort. The urgency of the environmental problem is thus relevant to determining whether efforts to reach a negotiated resolution have been adequate. For example, where a resource is plentiful, it may not be possible to justify unilateral actions without devoting several years to negotiations. The role that urgency plays is thus central. The UNFCCC parties have identified climate change as an urgent problem, deciding “that Parties will urgently work towards the deep reduction in global greenhouse gas emissions required to hold the increase in global average temperature below 2°C above pre-industrial levels.”[14]

A widely acknowledged general principle of international environmental law is that States are required to cooperate with each other in mitigating transboundary environmental risks. In the Lac Lanoux arbitration, the tribunal held that France had complied with its treaty and customary international law obligations to consult and negotiate in good faith before diverting a watercourse shared with Spain. However, the duty to negotiate did not require France to obtain Spain’s consent.[15] Similarly, the Stockholm Declaration, Principle 24 provides that:

co-operation through multilateral or bilateral arrangements or other appropriate means is essential to effectively control, prevent, reduce and eliminate adverse environmental effects resulting from activities conducted in all spheres, in such a way that due account is taken of the sovereignty and interests of all states.

The United Nations General Assembly endorsed this principle but noted that it should not be construed to enable other States to delay or impede the exploitation and development of natural resources within the territory of States.[16]

The panel in US—Shrimp (Article 21.5Malaysia) noted that the good faith negotiations had to be ongoing. The panel emphasized that the right to take unilateral measures was provisional, not permanent, and subject to ongoing WTO supervision:

[I]n a context such as this one where a multilateral agreement is clearly to be preferred and where measures such as that taken by the United States in this case may only be accepted under Article XX if they were allowed under an international agreement, or if they were taken further to the completion of serious good faith efforts to reach a multilateral agreement, the possibility to impose a unilateral measure to protect sea turtles under Section 609 is more to be seen, for the purposes of Article XX, as the possibility to adopt a provisional measure allowed for emergency reasons than as a definitive ‘right’ to take a permanent measure. The extent to which serious good faith efforts continue to be made may be reassessed at any time. For instance, steps which constituted good faith efforts at the beginning of a negotiation may fail to meet that test at a later stage.[17]

Making the right to take unilateral measures provisional is consistent with the manner in which the precautionary principle is incorporated into Article 5.7 of the SPS Agreement, which permits provisional measures where scientific evidence is insufficient.

In the Shrimp case, the survival of highly migratory species depends on concerted and cooperative efforts on the part of many countries whose waters are traversed in the course of migration. The panel characterized the legal framework as follows:

(1) the need to protect migratory species has been recognized by the WTO and numerous international instruments; (2) sustainable development is a WTO objective; (3) there was the common opinion of WTO membership expressed in the 1996 Report of the Committee on Trade and Environment endorsing “multilateral solutions based on international cooperation and consensus as the best and most effective way ...to tackle environmental problems of a transboundary or global nature”; and (4) the parties to the dispute have accepted almost all of the relevant multilateral environmental agreements.[18]

Climate change raises similar issues, and the jurisprudence in the Shrimp case will be highly relevant in the event of a WTO dispute over climate change mitigation or adaptation measures. This WTO jurisprudence also suggests some other factors that may be relevant to determining the WTO consistency of climate change measures. The key factors that need to be taken into account in assessing whether to permit unilateral trade measures to conserve transboundary or global resources can be summarized as follows. They must be preceded by good faith efforts to reach a negotiated solution, be applied flexibly to take into account different conditions among countries, and comply with transparency and procedural fairness. In some circumstances, they may require technical assistance. However, the degree of urgency may be a factor that requires much greater or lesser effort to reach a negotiated solution, particularly with respect to the time frame involved.

The US Safe Climate Act, which has not been implemented, is an example of the types of unilateral border taxes and subsidies that might be implemented to address competitiveness concerns. A stated purpose is to address the threat of carbon leakage, and it provides that an international agreement with GHG-emitting nations is a preferable alternative. It is a unilateral measure designed to pressure other countries to limit their GHG emissions. It would require an annual report to Congress regarding whether China and India have adopted GHG standards at least as strict as those adopted by the United States.[19] However, this type of regime requires careful design and implementation in order to avoid violating WTO rules.[20]

Like the EU Aviation Directive, the US Safe Climate Act shows that it is possible to make progress on climate change unilaterally, not just multilaterally. The same is true with respect to international economic law. In the case of the WTO, for example, countries can eliminate trade barriers unilaterally, as long as the most- favored nation (MFN) rule is observed, and bilaterally or plurilaterally, as long as GATT Article XXIV and the General Agreement on Trade in Services (GATS)

Article V are observed. In the case of climate change, however, the regime is less developed and there is greater uncertainty than in the WTO (and this in spite of some uncertainty in the WTO regarding the compliance of many free trade agreements with WTO rules). It might be useful to make explicit provision for principles such as MFN and MFN exceptions in the UNFCCC, to reduce the uncertainty regarding the consistency of unilateral, bilateral, and plurilateral approaches to climate change regulation. As with the WTO, unilateral, bilateral, and plurilateral approaches can complement multilateral approaches, by pushing countries to follow suit multilaterally. The UNFCCC already incorporates the language of GATT Article XX regarding arbitrary or unjustifiable discrimination between countries.

  • [1] Meltzer, “Regulating CO2 Emissions from Aviation in the EU”; Case C-366/10 Air Transportation Association of America v. Secretary of State for Energy and Climate Change of the United Kingdom ofGreat Britain and Northern Ireland, 21 December 2011 (accessed March 15, 2013); Council Directive 2008/101/EC, 2009 OJ(L 8/3) (EC) (amending Council Directive 2003/87/EC so as to include aviation activities in thescheme for greenhouse gas emission allowance trading within the community) (Aviation Directive).
  • [2] Case C-366/10 Air Transportation paras. 50—4, 75—8.
  • [3] Appellate Body Report, Argentina—Measures Affecting Imports of Footwear, Textiles, Apparel andother Items (Argentina—Textiles and Apparel), WT/DS56/AB/R, adopted April 22, 1998, para. 70.
  • [4] Case C-366/10 Air Transportation paras. 101—30.
  • [5] Case C-366/10 Air Transportation para. 106.
  • [6] Appellate Body Reports, US—Shrimp; Appellate Body Reports, United States—Import Prohibition of Certain Shrimp and Shrimp Products, Recourse to Article 21.5 by Malaysia (US—Shrimp, Article21.5—Malaysia), WT/DS58/AB/RW, adopted November 21, 2001.
  • [7] Earth Island Institute v. Christopher, 20 CIT 1389, 948 F. Supp. 1062 (Court of InternationalTrade 1996).
  • [8] Convention on International Trade in Endangered Species of Wild Fauna and Flora, Signed atWashington, D.C., March 3, 1973, Amended at Bonn, June 22, 1979, entered in force July 1, 1975 (accessed April 5, 2013).
  • [9] Appellate Body Report, US—Shrimp para. 121.
  • [10] Appellate Body Report, US—Shrimp (Article 21.5—Malaysia) paras. 123—4. Emphasis in the original.
  • [11] Rio Declaration on Environment and Development refers to transboundary and global environmental problems. However, Agenda 21 only refers to “transborder problems.”
  • [12] Ian Brownlie, Principles of Public International Law (2nd edn., Oxford University Press, Oxford1973) 299-301.
  • [13] Ian Brownlie, Principles of Public International Law (6th edn., Oxford University Press, Oxford2003) 297.
  • [14] Draft decision —/CP.18, Agreed outcome pursuant to the Bali Action Plan para. 1.
  • [15] Lac Lanoux (Spain v. France) (1957) 24 ILR 101; Nuclear Tests Cases (New Zealand v. France)(1974) ICJ 457.
  • [16] UNGA Res. 2995 XXVII (1972); Patricia W. Birnie and Alan E. Boyle, International Law andthe Environment (Oxford University Press, Oxford 1992) 102—9.
  • [17] Panel Report United States—Import Prohibition of Certain Shrimp and Shrimp Products, Recourse toArticle 21.5 by Malaysia (US—Shrimp, Article 21.5—Malaysia), WT/DS58/RW, adopted November 21,2001, para. 5.88. Emphasis in the original.
  • [18] Panel Report, US—Shrimp (Article 21.5—Malaysia) paras. 5.53—5.57.
  • [19] Morosini, “Trade and Climate Change” 734—5.
  • [20] Joost Pauwelyn, “U.S. Federal Climate Policy and Competitiveness Concerns: The Limits andOptions of International Trade Law” (2007) Nicholas Institute for Environmental Policy SolutionsWorking Paper NI WP 07-02.
 
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