WTO NEWS: SPEECHES DG PASCAL LAMY
Wednesday, 10 May 2006
Lamy highlights environment dimension of the trade talks
Director-General Pascal Lamy, in his remarks to the Commission on Sustainable Development on 10 May 2006, urged WTO members to pursue “more forcefully” the environment dimension of the Doha Round. He said that “negotiations on the trade liberalization of environmental goods and services, as well as on the relationship between WTO rules and multilateral environmental agreements, could have a positive impact on the energy sector”.
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Ladies and gentlemen,
It is my pleasure to participate at this important event. Allow me to
begin by congratulating you on your choice of topics for CSD-14. In
having chosen to focus this particular session of the CSD on “energy for
sustainable development,” looking also at the related issues of
industrial development, air pollution, and climate change, you have
chosen a very timely subject.
Sustainable development must become a key driver of energy policy.
Evidence of the environmental damage that our current energy policies
are causing is mounting every day. The Artic Climate Impact Assessment
report has given us important indicators of the rate at which are our
climate is changing. The report notes that in the Artic Sea, summer ice
has decreased by nearly 27% in the past 50 years, in part, due to global
warming. Moreover, the rate at which we have been losing Artic ice has
accelerated by some 20% in the past 30 years. Global warming has now
become the most serious environmental challenge of the century. Our
energy policies have also taken their toll on human health. This is not
surprising since most people are obliged to continue to live in the
environment they pollute. Many of the world's biggest cities are now
suffering from serious air pollution due to transportation and
industrial development. High levels of lead in the human bloodstream is
only one of many consequences.
Today, the global economy continues to be fossil fuel-driven, relying
mostly on oil, coal, and natural gas. Only 14% of the world's primary
energy supply is from renewables. According to the International Energy
Agency, if existing patterns of economic development continue, the
world's energy needs are likely to rise by almost 60% in 2030. How,
then, do we intend to deal with this growing demand? It is clear that
adjustments need to be brought to our energy policies. We need to meet
our growing energy demand without putting either human health or the
environment at risk. We must also deal with the very complex issue of
energy security. In a world that is increasingly interdependent,
countries are — quite understandably — concerned about the reliability
of their energy supplies. While none of these issue are easy to resolve,
over the past week this forum has raised awareness and generated ideas.
Turning now to trade (which is as you know is one of my favourite topics
at the moment), it is undoubted that trade plays an important role in
energy policy. Trade can bring about greater energy security for
countries that are not themselves energy producers. It is also an
extremely important source of revenue for energy exporters. It is said
that trade flourishes at times of peace. But I would argue that orderly
trade in energy can itself contribute to world peace. While WTO rules
have set the beginnings of an architecture to address the trade-related
aspects of energy, these rules may need to evolve in future to address
energy trade more comprehensively.
The composition of the WTO's membership will be one of the determinants
of how quickly this process comes about. Only recently Saudi Arabia
joined the WTO, bringing an important part of energy trade under the
purview of the organization's multilateral rules. Several other energy
producers are line to acceed, such as Russia, Kazakhstan, and Algeria.
Since 1990, developing countries have accounted for around 60% of
world's annual fuel exports. Clothing is the only other sector where
they have achieved such dominance. Although most developing countries
export fuels to developed countries, trade amongst the developing world
has been rising. This has mainly been due to increased demand in Asia,
in particular in China, Korea and India. Most trade in energy takes
place at very low, or sometimes non-existent duties; particularly in
terms of developed country imports. But there are other barriers to
trade in energy, such as export restrictions and quotas, and
restrictions on transit. Such barriers will need to be addressed, albeit
gradually.
Of course the transportation of goods involves the consumption of
energy, whether in the course of maritime, road, or air transport. It is
vital for countries to internalize the negative environmental
externalities that arise in the course of this process. The harm done to
the environment must begin to feature as a “cost” in international trade
transactions.
In the Doha Round of trade negotiations countries are seeking to open
trade not only in goods, but also in services. A number of countries
have tabled offers on various kinds of energy services, such as
distribution and pipeline transportation. Some of these offers have been
made possible by the gradual opening of the energy sector that has taken
place at country level, and the shrinking of state monopolies. The
energy sector is increasingly being subjected to greater competition.
This is a welcome development, which has now found its reflection in the
Doha Round. In a world where 2.4 billion people still rely on
traditional biomass — wood and agricultural residues – for cooking and
heating in their homes, and where 1.5 billion do not have access to
electricity, energy services can play a vital role. Enhancing access to
such services would make a direct contribution to the fulfillment of the
Millennium Development Goals. I take this opportunity to ask all
countries to engage in these negotiations, and to step up existing
offers. I also take this opportunity to emphasize that the opening of
services markets is not synonymous to the deregulation of those markets.
Countries are completely within their rights under the WTO to continue
to regulate their services sector, provided they do so
non-discriminatorily.
Having spoken about the market opening potential of the Doha Round in
energy, let me now turn to its sustainable development dimension.
Negotiations on the trade liberalization of environmental goods and
services, as well as on the relationship between WTO rules and
multilateral environmental agreements, could have a positive impact on
the energy sector. Having said that, the WTO's contribution to
sustainable development would only be effective if it is made part of a
broader effort by more specialized international institutions, such as
UNEP, towards this goal.
In environmental goods and services, negotiators are seeking to
liberalize trade in the kinds of products and services that could either
prevent or limit pollution, or contribute to environmental clean-up. In
addition, some WTO members would like to include products that are
superior to others in terms of their environmental performance; for
instance, in their energy efficiency. Examples of the environmental
goods that have been proposed are wind turbines, solar panels,
geothermal energy sensors, fuel cells, and electricity meters. Lowering
barriers to trade in renewable energy could reduce its price, making it
a more viable alternative to the more polluting fuels. Environmental
services, such as consultancy services, have also featured in some of
the services offers that WTO members have tabled. Such consultancy
services in the energy sector could help countries boost their energy
efficiency.
Once again, I would like to encourage WTO members, most of which are
participants at your session – developed and developing alike — to
pursue these negotiations more forcefully because of their important
environmental dimension. In many of the developing countries that have
experienced strong economic growth in the past few years, emissions have
also risen; in some instances by up to 75%. In the US, the EU and Japan
the transport sector has seen the fastest growth in greenhouse gas
emissions, with emissions from international aviation growing far more
rapidly than other transport sectors. Greater access to environmental
goods and services can help combat these emissions, which pose both a
health and an environmental challenge to all of us.
In the WTO-MEA negotiations, WTO members are discussing ways to ensure
the harmonious co-existence between WTO rules and the various MEAs that
have been negotiated to protect our environment. It is undoubted that
greater coherence between different bodies of international law, and in
particular between the trade and environmental regimes, could lead to
improved global governance. I would also urge that these negotiations
continue to go forward.
Ladies and gentlemen, while energy is vital to economic growth, how we
use energy is equally vital to our health and environmental wellbeing.
There is no magic recipe for an ideal energy policy — one that would
respond to all our needs. So we must simply continue to labour and to
search for solutions — in part through the CSD. I would wish you all the
best of luck in your deliberations.
Thank you for your attention.