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Export rebates and the EU carbon border adjustment mechanism: WTO law and environmental objections

Leonelli, Giulia Claudia ORCID: 0000-0001-9567-3280 (2023) Export rebates and the EU carbon border adjustment mechanism: WTO law and environmental objections. Journal of World Trade, 56 (6). pp. 963-984. ISSN 1011-6702 (In Press)

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Identification Number: 10.54648/trad2022040


The EU proposal for a carbon border adjustment mechanism (‘CBAM’) has triggered a lively academic and policy debate. In June 2022, the European Parliament put forward amendments regarding the potential introduction of export rebates under the EU Emission Trading System (‘ETS’) and the CBAM. This article focuses on this specific proposal, enquiring into the WTO law compatibility of ETS/CBAM export rebates. First, it enquires whether the ‘pecuniary burden’ associated with compliance with the CBAM would qualify as a ‘charge’ that is ‘equivalent to an internal tax’ and that is ‘imposed consistently with Article III:2 GATT’. Second, it suggests that the ‘pecuniary burden’ associated with compliance with the ETS/ CBAM is unlikely to qualify as an adjustable product tax; the analysis draws on a close examination of relevant provisions in the General Agreement on Tariffs and Trade (GATT) 1994 and the Agreement on Subsidies and Countervailing Measures (‘SCMA’). Finally, the article develops some brief considerations on the detrimental environmental effects of export rebates. As the article concludes, the regulatory design of the CBAM is not perfect; export rebates, however, would make this scheme considerably worse.

Item Type: Article
Additional Information: © 2023 Kluwer Law International BV, The Netherlands.
Divisions: Law
Subjects: K Law
G Geography. Anthropology. Recreation > GE Environmental Sciences
J Political Science > JZ International relations
H Social Sciences > HB Economic Theory
Date Deposited: 29 Sep 2023 15:03
Last Modified: 23 Jun 2024 17:51

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