In the latest issue of the JIEL, Michael McKenzie discusses the interaction of climate change and the Generalized System of Preferences (GSP). He notes two ways that preferences could help fight climate change:
The first way that preferential tariff treatment under a GSP scheme could be tied to the issue of climate change, is to make preferences under the scheme conditional upon a developing country taking certain actions to mitigate and/ or adapt to climate change.
The second way that preferential tariff treatment under a GSP scheme could be tied to the issue of climate change, is for developed countries to provide preferential tariff treatment to low carbon goods and services originating in developing countries. The aim would be to encourage the production of low carbon goods and services in developing countries.
The first option is something I've heard of before with GSP programs: Give tariff preferences to countries who adopt particular policies or take certain actions. By contrast, the second is something I have not come across: Tariff preferences are granted only where the products at issue are made in a certain way. I suppose this is the intersection (or perhaps "collision" is a better term) of GSP and PPMs. This may have been tried before, but it's the first I've heard of it.
Despite presenting a number of legal and practical challenges, it is an approach that has significant potential and merits further consideration by trade and climate change policymakers in developed countries.