Governance and domestic policymaking, typically considered a state's sovereign right under international law, are now increasingly regulated at the international level. As such, when states implement policy, consideration must now be given to international measures and obligations, in addition to the interests of domestic governmental and private actors. This growing influence of international
obligations on domestic policymaking may be viewed as a violation of the principle of state sovereignty, which asserts that states have exclusive sovereignty over their own territory. Nevertheless, through increasing participation in intergovernmental organizations and other international agreements, states continue to delegate significant amounts of power to international institutions. As a result, policymaking
at the domestic level has become increasingly more complex as it is subject to multilevel regulation and various levels of legal orders. Therefore, it is necessary to examine the impact that international regulation has on domestic policymaking. This Capstone Project analyzes the potential economic impact of Directive 2008/101 (the "Directive"), a policy recently implemented to include aviation emissions in the European Emissions Trading System (the EU ETS). Despite the uncertainty of the findings, it is maintained that the Directive will have some impact on trade and the aviation industry. Therefore, the Capstone Project is concerned primarily with the Directive's legality under international trade rules at the WTO. It is important to consider whether the EU's measure to include aviation emissions is
justifiable under WTO law, as the EU's unilateral action to regulate global emissions is the first of its kind. The arguments in the following maintain that, although the Directive may be inconsistent with the EU's legal obligations arising out of the WTO agreements, WTO case law may provide the EU some basis for justification for the Directive. This Capstone Project is concerned primarily with the argument about whether the EU should balance their obligations under the WTO with their sovereign right to policymaking. To what extent should states balance the selfinterest of various state actors with their international obligations? Through the analysis of the Directive, this Capstone Project will provide a greater understanding on the interplay between the two. It is evident that the issues raised are relevant to the unilateral action by the EU to develop a regulatory measure for aviation emissions; the Directive will either be the catalyst for increased environmental regulation under international obligations, or lead to a decline in the effectiveness of intergovernmental organizations.