Unilateral carbon border measures: key legal issues

Parties to the United Nations Framework Convention on Climate Change (UNFCCC) have been engaged in discussions on the future of the climate change regime. While the principle of “common but differentiated responsibilities” has so far played a central role in defining rights and responsibilities of countries, there has been increasing demand from the developed countries that both developed and developing countries would need to undertake commitments to address the problem. Any unilateral trade action would have serious implications for the balance of rights and obligations that a multilateral agreement on climate change may hope to achieve. This could however be avoided if countries are able to achieve clarity on the conditions that need to be met prior to the exercise of any unilateral trade measures under the UNFCCC framework. This paper deals with the issue of the possible ways in which this issue may be addressed.