Especially in antitrust cases both the United States and the European Union have a longstanding history in exercising extraterritorial jurisdiction (Neale/Stephens, 1988).
For example, the European Commission extends jurisdiction to cartel cases outside the territory of the European Union if the economic effects of the regulated conduct are “di-rect, immediate, reasonably foreseeable and substantial”. With respect to antitrust cases the US Department of Justice prosecutes “foreign conduct that was meant to produce some substantial effect in the United States”. Sometimes the “effects-doctrine”
is not only based on contact, but as well on a balance of interests (Mann, 1984). This means that the interest of the state that wishes to exercise its jurisdiction has to be bal-anced with the interests of other states affected by the relevant issue.
The experiences gathered in the field of business law as well as in the field of criminal law in literature have been transferred to the field of the environmental law of the sea, especially with regard to the question of under which circumstances port state jurisdic-tion on vessels may be used with respect to activities outside the territorial waters of the port state that is claiming jurisdiction. In order to define the quality of the nexus be-tween activity and effect that is necessary for the establishment of an extended territo-rial jurisdiction, the following aspects must be considered to be of importance and have
to be balanced when assessing the right of a port state to exercise extraterritorial juris-diction:
The significance of the effects on the state exercising jurisdiction
The interests of the international community
The interests of foreign states that are possibly effected by the use of extraterri-torial jurisdiction (Molenaar 2007a)
Even if the result of the balancing test should allow the exercise of extraterritorial juris-diction, the lawfulness of a certain measure still depends on the measures that are foreseen for the enforcement of the legislation.
12.3.1 The significance of the effects on the state exercising jurisdiction
For the purpose of this study the effects of climate change as such and the implications on the member states of the European Union can be assumed as known. Although the consequences of climate change may be worse for non-EU countries and especially for developing countries, there is no doubt that climate change will have a serious adverse impact on the European countries and that therefore the effects of the emission of greenhouse gases as such are of high significance. The total emissions of maritime transport account for 3.3 % of all global CO2 emissions and are therefore not negligible.
The polluter-pays principle – although not customary law – also supports the integra-tion of maritime transport into the EU ETS. If the emissions of maritime transport would not be covered by some kind of scheme to reduce CO2 emissions, the overall effect of all efforts to reduce greenhouse gas emissions would be significantly reduced. Alto-gether it must be stated that the effects of uncontrolled CO2 emissions from maritime transport are significant.
12.3.2 The interests of the international community
Although neither UNFCCC nor UNCLOS contains explicit (and concrete) obligations re-lating to the reduction of greenhouse gases emitted by international shipping, both conventions emphasize the strong interest of the international community in global cli-mate and the marine environment respectively. However, even if UNFCCC and UN-CLOS both entail obligations to protect the climate and the oceans respectively, neither treaty obliges member states to fulfil such obligations by regulating the greenhouse gas emissions of internationally operating vessels. But the change in the Earth’s climate and its adverse effects are acknowledged in the UNFCCC to be the common concern of mankind. The concept of common concern of mankind makes clear that there is a strong and widely accepted interest of the international community to reduce all kind of greenhouse gases, regardless of whether they are produced in territorial waters or on the high seas. The concept of common concern of mankind furthermore contains the mandate of all states to take measures in order to avoid climate change. As a counter-part to the polluter-pays principle, a port state must therefore have the possibility to
in-fluence the volume of greenhouse gas emissions that are directly related to transports to and from that state. The responsibility of the state vis-à-vis the state community gives good reasons for not only reducing national emissions but also greenhouse gas emissions related to transports of or from a state.
Furthermore the international community has good reasons for aiming at a global cov-erage of CO2 emissions. This is especially true for maritime transport as a reduction of CO2 emissions can be achieved in this context at relatively low cost.
12.3.3 The interests of foreign states that are possibly affected by the use of ex-traterritorial jurisdiction
It is difficult to perceive which interests of third states could be affected by the introduc-tion of an extraterritorial ETS going beyond the pure – and legitimate – interest of a state to regulate CO2 emissions. Although the right of self-determination certainly is to be acknowledged, it has to be kept in mind that the right of self-determination must be interpreted in the light of the UNFCCC that establishes the protection of the climate as common concern of mankind. In legal terms this means that – if there is a conflict of competences or jurisdiction - the right of self-determination is limited if the right is used in a way that is not in line with the objectives of the UNFCCC. However, in practice the respect for the rights of third states to enact effective legislation at their own requires that EU legislation provides enough flexibility in order to avoid that certain emissions are regulated twice by different states and with possibly different or even contradictory obligations for the addressee of such legislation63.
12.3.4 Summary
There are strong reasons for the introduction of an extraterritorial ETS. The interests of the European Union and of the international community are significant enough to allow for extraterritorial measures. As long as third countries do not enact any legislation that covers the greenhouse gas emissions of marine transport, the interests that can be in-voked on the part of third countries are very weak64. This is especially true as long as non-EU states do not enact any legislation with respect to emissions of marine trans-port. The balancing test therefore supports the notion that an extraterritorial ETS for marine transport is justified in principle. However, it must be kept in mind that the actual form of enforcement of a legislative measure may have an impact on the justification of extraterritorial legislation as well.
But before this question can be examined in more detail, it is necessary to assess whether the use of extraterritorial jurisdiction is further limited by the international law of the sea.
63 This question will be discussed in more detail in Chapter 13.
64 This conclusion is supported by the findings of Pache (Pache, 2008) with respect to an integration of aviation into the EU-ETS.