Developing countries won’t be able to keep up with a BCA. Zhang 09 — ZhongXiang Zhang , Senior Fellow, East-West Center & Distinguished University Professor at Tianjin University, 2009, (“The U.S. proposed carbon tariffs, WTO scrutiny and China’s responses,”MPRA, Sept 1, Available Online at , Accessed on 07-18-23)
It should be emphasized that the aim of including trade provisions is to facilitate negotiations while keeping open the possibility of invoking trade measures as a last resort. The latest version of the Lieberman-Warner bill has brought the deadline forward to 2014 to gain business and union backing.4 The inclusion of trade provisions might be considered the “price” of passage for any U.S. legislation capping its greenhouse gas emissions. Put another way, it is likely that no climate legislation can move through U.S. Congress without dealing with the issue of trade provisions. An important issue on the table is the length of the grace period to be granted to developing countries. While many factors need to be taken into consideration here (Haverkamp, 2008), further bringing forward the imposition of allowance requirements to imports is rather unrealistic, given the already very short grace period ending 2019 in its original version. It should be noticed that the Montreal Protocol on Substances that Deplete the Ozone Layer grants developing countries a grace period of 10 years (Zhang, 2000). Given that the scope of economic activities affected by a climate regime is several orders of magnitude larger than those covered by the Montreal Protocol, if legislation incorporates border adjustment measures (put the issue of their WTO consistency aside), in my view, they should not be invoked at least 10 years after mandatory U.S. emission targets take effect.
Moreover, unrealistically shortening the grace period granted before resorting to the trade provisions would increase uncertainty of whether the measure would withstand a challenge by U.S. trading partners before the WTO. As the ruling in the Shrimp-Turtle dispute indicates (see Box 2), for a trade measure to be considered WTO-consistent, a period of good-faith efforts to reach agreements among the countries concerned is needed before imposing such trade measures. Put another way, trade provisions should be preceded by major efforts to negotiate with partners within a reasonable timeframe. Furthermore, developing countries need reasonable time to develop and operate national climate policies and measures. Take the establishment of an emissions trading scheme as a case in point. Even for the U.S. SO2 Allowance Trading Program, the entire process from the U.S. Environmental Protection Agency beginning to compile the data for its allocation database in 1989 to publishing its final allowance allocations in March 2003 took almost four years. For the first phase of the EU Emissions Trading Scheme, the entire process took almost two years from the EU publishing the Directive establishing a scheme for greenhouse gas emission allowance trading on 23 July 2003 to it approving the last national allocation plan for Greece on 20 June 2005. For developing countries with very weak environmental institutions and that do not have dependable data on emissions, fuel uses and outputs for installations, this allocation process is expected to take much longer than what experienced in the U.S. and the EU (Zhang, 2007b).