The WTO/UNEP report on “Trade and Climate Change” published today examines the intersections
between trade and climate change from four perspectives: the science of climate
change; economics; multilateral efforts to tackle climate change; and national
climate change policies and their effect on trade.
The WTO and UNEP are partners in the pursuit of sustainable development and this
report is the outcome of collaborative research between the WTO and UNEP.
“With a challenge of this magnitude, multilateral cooperation is crucial and a
successful conclusion to the ongoing climate change negotiations is the first
step to achieving sustainable development for future generations,” said
WTO Director General Pascal Lamy and UNEP’s Executive Director Achim Steiner.
Both Steiner and Lamy urge the international community to seal an equitable and
decisive deal at the crucial UN climate convention meeting in Copenhagen,
Denmark in December 2009. They also urge nations to conclude the Doha trade round
which includes opening trade in environmental goods and services, a
complementary track towards reducing greenhouse gas emissions to
The scientific evidence is now clear that the Earth’s climate system is warming
as a result of greenhouse gas emissions which are still increasing
worldwide, and will continue to increase over the coming decades unless there are
significant changes to current laws, policies and actions. Although freer trade
could lead to increased CO2 emissions as a result of raising economic activity,
it can also help alleviate climate change, for instance by increasing the diffusion of
The global economy is expected to be affected by climate change. Sectors such as
agriculture, forestry, fisheries, tourism and transport infrastructure which are
critical for developing countries are more specifically affected. These impacts
will often have implications for trade.
Opening up trade and combating climate change can be mutually supportive towards
realizing a low carbon economy the new report says. Contrary to some claims,
trade and trade opening can have a positive impact on emissions of greenhouse
gases in a variety of ways including accelerating the transfer of clean
technology and the opportunity for developing economies to adapt those
technologies to local circumstances. Rising incomes, linked with trade opening
can also change social dynamics and aspirations with wealthier societies having
the opportunity to demand higher environmental standards including ones on
greenhouse gas emissions. In addition there is evidence that more open trade
actions to combat climate change can catalyze global innovation including new
products and processes that can stimulate new clean tech businesses.
National policies, from traditional regulatory instruments to economic
incentives and financial measures, have been used in a number of countries to
reduce greenhouse gas emissions and to increase energy efficiency. The report
highlights the effects that this complex web of measures might have on
international trade and the multilateral trading system. In recent years, there
has been a proliferation of technical requirements (voluntary standards and
labelling) related to climate-friendly goods and energy efficiency. Likewise,
financial support programmes for the use of renewable energies have also
The report also reviews extensively two particular types of pricing mechanisms
that have been used to reduce greenhouse gas emissions: taxes and emissions
trading systems. Incidentally, the report reflects the debate that is taking
place on policies aimed at preventing carbon leakage and protecting
competitiveness, including on border measures.
Overall, the report highlights that there is scope under WTO rules for
addressing climate change at the national level. However, the relevance of WTO
rules to climate change mitigation policies, as well as the implications for
trade and the environmental effectiveness of these measures, will very much
depend on how these policies are designed and the specific conditions for
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