Critical Study of Border Carbon Adjustments
The paper seeks to refute the imposition of Border Carbon Adjustments (BCA) both from theoretical and legal perspectives. Not only are BCAs expected to defy WTO norms but they are also against the spirit of Kyoto and post-Kyoto protocols. These taxes are expected to become a tool of protectionism and will be against the spirit of free and fair trade. In the current scenario when most of the economies have recognised the need to undertake climate change measures, such adjustments on imports will only serve to discriminate against a subset of countries, mostly developing. In addition, the design of such taxes is not only extremely complex leading to an element of arbitrariness but the corresponding data requirements are humongous. It is highly unlikely that the developing countries will have the resources to collect such complex data sets. Moreover, BCAs will also face stiff opposition on grounds of violating the WTO norms. It will be very difficult for the implementing countries to comply with National Treatment and Most Preferred Nation clauses for the WTO to condone them. That said, the devil lies in the details and unless and until these are imposed and face opposition in WTO, it is hard to reach a conclusion with definiteness.
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