In general, the concepts and principles of international environmental law and those ofWTO law are not inherently inconsistent with each other. Indeed, many of the same concepts and principles find expression in both areas of public international law, albeit in different ways: sustainable development, the precautionary principle, and common but differentiated responsibilities/special and differential treatment are key examples. The same principles find expression in the UNFCCC and the Kyoto Protocol. Moreover, the international jurisprudence has taken a consistent approach in key cases, in the WTO Appellate Body, the International Court of Justice and the ECJ. The boundaries of territoriality and sovereignty are still shifting, but recent jurisprudence has taken a consistent approach to unilateral measures in this regard, one that supports the limited use of unilateral measures to address climate change. In this chapter and in subsequent chapters, we analyze those limits.
The polluter-pays principle, which forms part of international environmental law, has encountered political resistance in international climate change law. In particular, the wide use of fossil fuel subsidies and the disincentives to subsidize clean energy technology reveal a need to change the multilateral regime, particularly the WTO SCM Agreement. This represents a weak point, where the multilateral consensus is lacking and unilateral measures might begin to fill the gap.
The science of climate change demonstrates that the need for mitigation and adaptation is becoming increasingly urgent. International regulatory capture has become a source of multilateral paralysis in both the UNFCCC and the WTO. Regulatory capture also creates risks that unilateral measures will serve as disguised restrictions on international trade rather than legitimate efforts to combat climate change. For this reason, unilateral measures should be designed and applied in accordance with GATT Article XX, to minimize the risk of unilateral measures that constitute arbitrary or unjustifiable discrimination or disguised restrictions on international trade. This same language has been incorporated into international environmental law and the UNFCCC. The political and economic context that has led to multilateral negotiation paralysis means that unilateralism may represent the future of climate change regulation, at least in the short to medium term. However, this does not mean that we cannot use the multilateral consensus that has been achieved so far to regulate the use of unilateral measures.
In subsequent chapters, we will analyze the limits of unilateralism. Chapter 3 analyzes the limits that WTO law places on measures that affect international trade. Chapter 4 will analyze the limits that foreign investment agreements place on climate change measures and consider the consequences of these measures for the attraction of foreign investment and the capital and technology that it can bring. Chapter 5 will analyze the implications of intellectual property rights for technology transfer to adapt farming to a changing climate and argue in favor of flexibility in multilateral and regional agreements to maintain a range of policy options. We favor an approach to intellectual property rights that maintains policy flexibility in response to an uncertain political and economic environment.
In the current political and economic context, multilateralism is not working in the UNFCCC and WTO systems. This requires unilateralism, but in a well- considered approach that creates economic incentives to engage the private sector and to push governments into effective multilateral agreements. For example, funding for adaptation and technology transfer should be made conditional on recipients implementing PPP-based mitigation measures, in order to channel funding and technology to combat climate change. This can be accompanied by unilateral trade measures on goods and services to create political will in developing countries; the private industry that opposes climate change action based on competitive concerns might change their stance if unilateral trade measures begin to affect market access and competitiveness. However, unilateral measures to combat climate change need to be taken in a manner that is consistent with existing obligations and principles of international environmental and economic law, in order to more effectively address this urgent global issue.