“Border Carbon Adjustments: A Real Threat or a Storm in a Teacup?”

So far, the only examples of existing nation-wide mandatory mitigation mechanisms are the emission trading schemes in the EEA countries and New Zealand. Prospects for nation-wide mitigating mechanisms in key countries like the U.S., Canada and Japan are highly uncertain. The pre-ferred way of levelling the playing field to minimize the risk of carbon leakage2 in all of the countries which have opted or planned for emission trading schemes is internal cost-reducing measures. The probability that the alternative, i.e. unilateral border carbon measures (BCAs)3, will be introduced and enforced on a larger scale during the next few years is relatively low due to a host of administrative, economic, legal and politi-cal constraints and problems. If BCAs should be brought to the WTO as dispute cases, there is no reason why these could not be handled through the normal dispute settlement system. The risk that we will see an ava-lanche of BCA related disputes seems very small. Negotiations for new and “greener” rules in the WTO to obviate the need for litigation proce-dures appear both unnecessary and risky, if even possible.