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WORKING PAPER 09-9

The World Trade Organization and Climate Change: Challenges and Options

by Gary Clyde Hufbauer, Peterson Institute for International Economics
and Jisun Kim, Peterson Institute for International Economics

Trade and environment intersect in many ways. Aside from the broad debate as to whether economic growth and trade adversely affect the environment, there are linkages between existing rules of the World Trade Organization (WTO) and rules established in various Multilateral Environmental Agreements (MEAs). The main objectives of the United Nations Framework Convention on Climate Change (UNFCCC) and WTO regimes are to combat climate change and to promote sustainable development. Controlling greenhouse gas (GHG) emissions promises to be a top priority for both national and international agendas, and special attention must be given to the relationship between the WTO and the emerging international regime on climate change. There are several options for how the WTO and UNFCCC can approach trade and environment issues including acting multilaterally to create norms on trade and climate, going on a case-by-case basis within the WTO judicial process, and waivers or amendments to current WTO legal text to accommodate environmental controls.

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