The Case for ‘Sui-Generis’ Developing Country–led Initiatives on Carbon Footprint Labelling

This Note makes the case for recognizing developing country-led ‘sui generis’ labelling schemes linked to carbon offset measures, after due verification, as equivalent to or replacing requirements related to product carbon labelling schemes. Such labelling schemes are increasingly being explored in many OECD countries and even if, de jure, voluntary for both domestic producers and importers, they could potentially have an adverse impact on developing country exports due to their ‘de facto’ mandatory nature and the competitive advantage that products labelled as ‘climate-friendly’ enjoy in the market. While product carbon labelling schemes are still in their early days, they have the potential to evolve rapidly through private-sector or supermarket-led schemes. ‘Sui generis’ voluntary positive labelling initiatives launched by developing countries themselves could tap into their inherent advantages in terms of the lower carbon footprint of their products, particularly for labour-intensive products. Such schemes could also benefit from the Clean Development Mechanism (CDM) and other carbon offset projects for developing countries, including those channelled through the ‘Green Fund’ that could be set up under the auspices of the UNFCCC. Given the positive benefits of such schemes for both the environment as well as in promoting export-led development in developing countries, ways must be found to ensure a ‘legitimate space’ for such schemes under WTO rules, most notably under the TBT Agreement.