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∙ The regulation of energy in international law is highly fragmented and largely incoherent. We submit that pertinent issues should be addressed by a future Framework Agreement on Energy within WTO law.
∙ Successful regulation of energy requires a coherent combination of rules both on goods and services. Energy services require new classifications suitable to deal coherently with energy as an integrated sector.
∙ Rules on subsidies relating to energy call for new approaches within the Framework Agreement on Energy. A distinction should be made between renewable and non-renewable energy. Moreover, disciplines need to be developed in the context of emission trading.
∙ The Framework Agreement should address the problem of restricting energy production and export restrictions.
∙ Disciplines on government procurement are able to take into account policies on green procurement, but a number of changes to the GPA Agreement will be required to make green procurement more effective and attractive.
∙ In view of the close interactions between the energy sector and climate change, formulating effective rules to address energy under the WTO system will catalyse coherence and complementarity between the climate and trade regimes.
Sixty years ago, when the rules of the GATT were negotiated, world energy demand was a fraction of what it is today and so were energy prices. While energy has always been a crucial factor in geopolitics, at that time liberalising trade in energy was not a political priority. The industry was largely dominated by state-run monopolies and thus governed by strict territorial allocation.
Legal and economic problems relating to climate-change mitigation transgress national boundaries and thus are at odds with the Westphalian system of territorially defined allocations of powers and responsibilities of government. This problem, of course, is not new and has significantly shaped the contours and concepts of international environmental law. States and the international community have shown considerable imagination and engaged in innovative legal engineering to cope with transnational issues. They have crafted emerging principles, rules, and monitoring mechanisms designed to strike a balance between two conflicting requirements: on the one hand, there is a pressing need to put an end to, or at least to slow down, the deterioration of the environment as well as forestalling new damage. On the other hand, there is a necessity for a realistic appraisal of the existing structures and the social and economic costs involved in this process both for developed states and even more so for developing countries. In addition, all of the above is undertaken within a framework of fragmented jurisdictions among states, which adds to the complexity of the task. For such reasons, progress at the legal level has been less conspicuous than one would have expected or desired. But progress has been made. The environment is no longer conceived of from a state-sovereignty-oriented perspective, as an asset that may belong to each state and in whose protection only the state concerned may be legally and practically interested.
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