Global Supply Chain under the Paris Agreement: The Relevance of Chemical & Product Regulations
(Published in: Natural Resources & Environment, Volume 31, Number 3, Winter 2017 [Article PDF])
By Catherine K. Lin and Philip A. Moffat
The Paris Agreement commits all parties to make “nationally determined contributions” (NDCs) via domestic laws to limit “the increase in the global average temperature to well below 2 °C above pre-industrial levels.” This article considers how this “bottom up” approach to limiting greenhouse gases (GHG) emissions can interact with the operations of global supply chains, as the latter can exert profound effect on local and national development.
Aided by the theory of Transnational Legal Process, we propose that resilient global supply chains can be had under NDCs, if the scope of certain existing chemical- and product-oriented environmental regulations that already apply to global supply chains can be expanded to cover, as appropriate, GHG emissions, energy use, water conservation, and/or use of natural resources key to mitigating climate change impacts. This could include: (a) the principles of “no data, no market,” mandated supply chain communication, and the authorization for or restriction of the placing of deleterious substances or products on the market as exemplified by the EU Regulation on Registration, Evaluation, Authorization, and Restriction of Chemicals (REACH);(b) the restriction of certain raw materials from finished products as is under RoHS; and/or (c) the requirement that due diligence be performed to trace the source of certain problematic raw material as exemplified by Section 1502 of the Dodd-Frank Act.
If so enacted, enterprises and their suppliers may be encouraged to shore up environmental compliance up and down the supply chain, strengthening its resilience even in the absence of formal legal requirements to do so by all DNCs. As such, we would be less concerned that the bottom-up approach under the Paris Agreement could lead to a “race to the bottom” by countries seeking to implement NDCs that favor development over environmental protection or be a “free rider” by delaying their own NDC implementation while awaiting for other countries to curb GHG emissions. Instead, resilient, self-governing global supply chains could become fora for a transnational process where global norms for domestic laws on GHG reduction could emerge from the Paris Agreement.
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