Another breakthrough was reached in October
2016, when nearly 200 countries agreed to phase
down global emissions of highly climatewarming HFCs. The deal amends the Montreal
Protocol, and requires cuts in HFC use starting in
2019 for wealthier countries, with all other
nations significantly reigning in consumption by
the end of the 2040s. The move could prevent up
to 0.5°C in global warming above pre-industrial
levels by the end of the century.
Much of the success of the Montreal Protocol
has been attributed to its institutional design. The
supreme decision-making body of the ozone
regime is the Meeting of the Parties (MOP), with
preparatory discussions taking place in the Openended Working Group (OEWG). These bodies
have proved, in contrast to those in many other
multilateral environmental agreements (MEAs),
generally harmonious forums for resolving the
key political, technical and financial issues faced
by the parties. A sense of community has traditionally prevailed, which has been helpful in
resolving disputes (although unfortunately, as
discussed below, this positive atmosphere has
not extended to discussions on HFCs, which
have been comparatively acrimonious).
Nearly 30 years after its inception, the ozone
regime has now reached a mature stage, where its
institutions are well established and its main
objective—the phase-out of the production and
consumption of ODS—has been largely met. The
Montreal Protocol, however, is still faced with
several challenges, and not just that of rising
HFC use: illegal trade in ODS, and the disposal
of banks of stored ODS, for example, remain
important concerns. Nonetheless, it is true to say
that the Montreal Protocol is widely accepted as
a highly effective regime. The result of this,
however, is that the issue of ozone protection has
largely dropped down the international agenda,
receiving only limited political attention.
5
Annex A.7: The World Trade
Organization and Energy Resources
While the WTO, with its 164 member countries,
provides the main global institutional framework
for coordinating and governing international
trade—trade in natural resources, including fossil
fuels, falls largely outside its remit (though some
rules have implications for resource reserves and
related services). Separate chapters were included in the WTO texts to address issues related to
agriculture and textiles, but not natural resources.
Some regional agreements have tried to bridge
this gap for energy, notably the Energy Charter
Treaty and the energy chapter in the North
American Free Trade Agreement (NAFTA), and
there were efforts to address energy within the
Transatlantic Trade and Investment Partnership
negotiations.
Several reasons for the special treatment of
natural resources in trade agreements have been
cited. First, the geographical distribution of natural resources is highly uneven and location of
production is largely immovable. Nearly 90% of
oil reserves are located within just 15 countries.
Second, the sovereign control of resourceendowed countries over their natural resources
and their right to exploit them for economic and
social development is recognised in international
law (see UN General Assembly Resolution 1803
of 1962). Third, trade in natural resources is
often perceived as a key national security issue
by exporters and importers. Fourth, the extraction and consumption of resources produce severe negative externalities compared with most
other traded products. Finally, a large proportion
of resource trade takes place under long-term
contracts, often through dedicated infrastructure
such as pipelines or liquefied natural gas tankers.
The exhaustibility of natural resources, and the
potential for infringements on national security
grounds, provide two potential justifications for
trade restrictions under WTO rules, although
these must be implemented in a nondiscriminatory way.
While these reasons may be broadly accepted,
in practice there are often blurred lines or different interpretations between countries. Most
5
The text above draws heavily on a Chatham House
Research Paper by Stephen O. Andersen, Duncan Brack
and Joanna Depledge (2014).
698
W. Jigang and P. Webb
2016, when nearly 200 countries agreed to phase
down global emissions of highly climatewarming HFCs. The deal amends the Montreal
Protocol, and requires cuts in HFC use starting in
2019 for wealthier countries, with all other
nations significantly reigning in consumption by
the end of the 2040s. The move could prevent up
to 0.5°C in global warming above pre-industrial
levels by the end of the century.
Much of the success of the Montreal Protocol
has been attributed to its institutional design. The
supreme decision-making body of the ozone
regime is the Meeting of the Parties (MOP), with
preparatory discussions taking place in the Openended Working Group (OEWG). These bodies
have proved, in contrast to those in many other
multilateral environmental agreements (MEAs),
generally harmonious forums for resolving the
key political, technical and financial issues faced
by the parties. A sense of community has traditionally prevailed, which has been helpful in
resolving disputes (although unfortunately, as
discussed below, this positive atmosphere has
not extended to discussions on HFCs, which
have been comparatively acrimonious).
Nearly 30 years after its inception, the ozone
regime has now reached a mature stage, where its
institutions are well established and its main
objective—the phase-out of the production and
consumption of ODS—has been largely met. The
Montreal Protocol, however, is still faced with
several challenges, and not just that of rising
HFC use: illegal trade in ODS, and the disposal
of banks of stored ODS, for example, remain
important concerns. Nonetheless, it is true to say
that the Montreal Protocol is widely accepted as
a highly effective regime. The result of this,
however, is that the issue of ozone protection has
largely dropped down the international agenda,
receiving only limited political attention.
5
Annex A.7: The World Trade
Organization and Energy Resources
While the WTO, with its 164 member countries,
provides the main global institutional framework
for coordinating and governing international
trade—trade in natural resources, including fossil
fuels, falls largely outside its remit (though some
rules have implications for resource reserves and
related services). Separate chapters were included in the WTO texts to address issues related to
agriculture and textiles, but not natural resources.
Some regional agreements have tried to bridge
this gap for energy, notably the Energy Charter
Treaty and the energy chapter in the North
American Free Trade Agreement (NAFTA), and
there were efforts to address energy within the
Transatlantic Trade and Investment Partnership
negotiations.
Several reasons for the special treatment of
natural resources in trade agreements have been
cited. First, the geographical distribution of natural resources is highly uneven and location of
production is largely immovable. Nearly 90% of
oil reserves are located within just 15 countries.
Second, the sovereign control of resourceendowed countries over their natural resources
and their right to exploit them for economic and
social development is recognised in international
law (see UN General Assembly Resolution 1803
of 1962). Third, trade in natural resources is
often perceived as a key national security issue
by exporters and importers. Fourth, the extraction and consumption of resources produce severe negative externalities compared with most
other traded products. Finally, a large proportion
of resource trade takes place under long-term
contracts, often through dedicated infrastructure
such as pipelines or liquefied natural gas tankers.
The exhaustibility of natural resources, and the
potential for infringements on national security
grounds, provide two potential justifications for
trade restrictions under WTO rules, although
these must be implemented in a nondiscriminatory way.
While these reasons may be broadly accepted,
in practice there are often blurred lines or different interpretations between countries. Most
5
The text above draws heavily on a Chatham House
Research Paper by Stephen O. Andersen, Duncan Brack
and Joanna Depledge (2014).
698
W. Jigang and P. Webb