배출권거래제와 WTO

Abstract

Emissions trading scheme (ETS) is a new and still developing system, and only a few developed countries such as EU and Australia have implemented it as a tool for reducing emissions. Although only ANNEX 1 parties of UNFCCC are obliged to reduce emissions, Korea voluntarily chose to implement ETS as the first country among non-ANNEX 1 parties. Korea is now in the process of designing its scheme, but it is very difficult to predict how the carbon market will be functioning in the future. In EU, WTO issues related to ETS have been discussed in various aspects. Faced with competitiveness concerns raised by industries, it was argued that some measures such as border tax adjustment should be applied in order to protect domestic industries and avoid "carbon leakage". With a huge amount of surplus allowances in the carbon market during EU ETS phaseⅠand Ⅱ, it was debated whether "free" allocation can be justified by the WTO agreements. In 2012, EU decided to include aviation industry into the ETS, which provoked fierce reactions from other countries and raised a number of legal questions. Issues on Clean Development Mechanism (CDM) and Joint Implement (JI) were also one of the topics which were studied. As the Korean economy depends on exports in large part, there are strong concerns that the new obligation imposed by ETS will weaken the competitiveness of business companies. To address these concerns, the scheme should be designed not to give too much burden to industries and some trade measures such as border tax adjustment needs to be implemented. The method of allocation of emissions allowances will be also more controversial in Korea, as all the allowances are expected to be allocated free of charge and the reduction target is different for each sector, which will make the allocation more likely to be regarded as "subsidy". To apply border tax adjustments to imports and exports may not be easy as setting the appropriate level of tax adjustment not to violate National Treatment obligation and Most Favored Nations obligation of GATT will be a very complicated process in the Korean scheme. Free allocation to firms is also likely to be regarded as "actionable" subsidy by the SCM agreement. However, it will depend on the trade effects on importing countries and how the allocation method is designed. Though there exist no linked carbon markets so far, EU is pushing other schemes to open the markets. If different schemes are linked, various issues regarding GATT and GATS will be raised, which may also require some parts of WTO regime to be changed. As only a few countries and regions have just started to design and implement ETS, it cannot be concluded yet whether this new system has succeeded or failed. As Korea voluntarily chose to implement ETS, it needs to address many critical issues in order to make ETS well established in the world trading system.