Interoperability in greenhouse gas emissions reporting: a key for CBAM alignment with WTO law

Law has historically played an important role in solving several transboundary environmental problems, such as acid rain and ozone layer degradation. Because of the static character of law, its application to contemporary global environmental crises, such as climate change, around which scientific, economic, and political contexts are rapidly evolving, is difficult. One current shortcoming of climate law is the absence of a robust and legally binding framework for the disclosure of emissions by individual private actors across jurisdictions. This perpetuates vagueness, uncertainty, and a lack of comparability regarding the obligations of individual emitters at the domestic level, which in turn impacts the ability of State Parties to enact their national commitments. Corporate climate disclosure rules with the potential to clarify the vagueness surrounding greenhouse gas (GHG) measurement are, however, currently being deployed in different jurisdictions. The first section of this article draws an outline of these emerging rules, highlighting a push towards interoperability. In addition to corporate disclosure rules, some actors, like the European Union (EU), are additionally resorting to trade-related measures to support their ambitious domestic climate policies. The unilateral deployment of those measures raises some questions regarding their compatibility with World Trade Organization (WTO) law. The second section of this article will examine the EU’s recent Carbon Border Adjustment Mechanism (CBAM), focusing on the mechanism’s GHG disclosure rules. This analysis leads to the conclusion that adjustments to CBAM’s disclosure rules to promote interoperability with other GHG disclosure standards could clarify some uncertainties regarding their alignment with WTO law.