UK Law and Practice Contributed by: Ruth Knox and Julian Wolfgramm-King, Paul Hastings LLP
tional responsibility for managing high sulphate was emanating from a landfill site in breach of statutory requirements. The court also granted permission for judicial review on the basis that the EA continues to owe positive obligations under Article 2 (Right to Life) and 8 (Right to a Private Life) of the European Con - vention on Human Rights, reflecting a broader theme of international climate change litigation founded on human rights arguments.
• Voluntary Carbon Market – London Stock Exchange. 3.2 Carbon Pricing and Trade Impacts The WTO General Agreement on Tariffs and Trade (GATT), which covers trade in goods, aims to reduce barriers to trade such as tariffs, quotas and other restrictions. It sets rules for non-discriminatory trade practices between countries to ensure that domestic and imported goods are treated similarly. The GATT principle of “national treatment” prohibits discrimination against imports compared with equiv - alent domestic products. For example, applying an emissions charge on imported steel could be prob - lematic if combined with issuing free carbon allowanc - es to domestic steel producers. The “Most Favoured Nation” (MFN) principle, which is central to the rules- based trading system supported by the GATT, pro - hibits WTO members from treating equivalent imports differently depending on their country of origin, for example by applying different emissions levies to the same type of cement or steel when imported from dif - ferent countries. Exemptions to the MFN principle are permitted for goods from countries with a free trade agreement and from developing countries. Under the GATT, countries also agree to a maximum (“bound”) tariff for each imported product. For goods, these bindings refer to ceilings on customs tariff rates. If a CBAM were designed as a customs duty, any additional tariff could therefore exceed this agreed maximum. Generally, countries can change national tariff bindings, but only if other WTO members agree to it. If no agreement is reached, it could lead to a legal challenge at the WTO. GATT also bans restrictions on trade “other than duties, taxes or other charges”, for example import quotas, import or export licences or other measures. Offering domestic producers an export rebate or a subsidy compensating for their domestic carbon costs could be challenged under the WTO’s Agreement on Subsidies and Countervailing Measures (ASCM). Authors argue that a CBAM could avoid breaching the principle of national treatment and meet the “lev - el playing field” requirement if applied as an import charge equivalent to an internal tax paid by domestic
3. Responses to International Developments 3.1 Voluntary Carbon Markets
The UK voluntary carbon market has grown rapid - ly over the past five years, with growing corporate demand driving an increase in the cost of offsets and support services. Two example regimes in the UK are the Woodland Carbon Code (the largest carbon stand - ard in the UK, with over 1500 registered projects) and the Peatland Code, which have their own registries. In addition, the London Stock Exchange’s Voluntary Carbon Market designation was launched in 2022 to identify funds and operating companies admitted to the Main Market or AIM which are investing in climate change mitigation activities such as carbon seques - tration, clean energy and new climate technologies. See 2.3 National Legal Regime (Command and con - trol measures); 2.3 National Legal Regime (Incentive schemes). Voluntary carbon units cannot currently be used for compliance in the UK ETS. However, the UK is actively reforming this structure. The UK ETS Authority has announced legislation to integrate high-integrity Greenhouse Gas Removals (GGRs) into the compli - ance scheme. This will allow certain certified removal units to be sold directly into the ETS from 2029. Voluntary carbon market-related information is pub - licly available: • Supply and Demand in the UK Voluntary Carbon Market July 2022 ; • Voluntary carbon and nature markets: raising integ - rity – consultation document; and
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