Domestic Implementation of the Kyoto Protocol : Potential for WTO Conflict

The Kyoto Protocol provides general terms dictating that members adopt policies aimed at the promotion of sustainable development; however the Protocol does not stipulate the specific methods by which members should design and implement these policies. Lack of harmonization in domestic implementation of the Protocol’s commitments makes it more likely that trade conflicts will arise. Though a review of the relevant literature, this paper discusses the potential arenas for conflict between domestic implementation of the Protocol and member obligations under the WTO. This article focuses on domestic implementation of the Protocol’s sustainable development requirements contained in Article 2, and discusses how various implementation strategies may create conflict of obligations under the WTO. The specific strategies discussed include government subsidies, product regulations, energy efficiency standards, eco-labeling, carbon taxes, procurement policies, and border tax adjustments. I conclude that while careful domestic implementation of many of these policies may rule out some possibilities for conflict, it is difficult to assess how effective (in terms of problem solving) these policies will be. Furthermore, I conclude that while the Kyoto Protocol is relatively “WTO proof”, it weakens regime requirements in terms of problem solving, as well as disharmonizes domestic implementation strategies. In doing so, it displaces the risk of non-compliance onto individual states and effectively removes the protective MEA framework, under which conflict is less likely to occur.