Climate Change Conference blogs
Report on Trade and Climate Change
issue of Climate Change intersects with international trade in a multitude
of different ways. While the WTO does not have rules that are specific to
energy, or to climate change per se, there is no doubt that the rules of the
multilateral trading system as a whole — the WTO “rule book” — are indeed
relevant to climate change.
There are many different perceptions of what the
trading system ought to do on climate change. While some would like to see
the trading system curb its own “carbon footprint,” through the greenhouse
gas emissions it generates in the course of the production, international
transportation, and consumption of traded goods and services; others are
more interested in how they can preserve their own competitiveness under a
stringent climate change mitigation regime.
More specifically, they would like to impose an
economic cost on imported products at their borders equivalent to the one
they suffer in curbing their own emissions. In other words, a “levelling of
the playing field” of sorts, based on an importing country's perception of
how that field may best be levelled.
Naturally, there are many different ideas floating
on what these “offsetting” measures may be, with most of the discussion
focussing on countries' most trade-exposed, energy-intensive, economic
sectors like iron and steel, and aluminium. For instance, while some
policy-makers are considering the imposition of domestic carbon taxes, with
adjustment for those taxes at their border; others are contemplating
emission cap-and-trade systems, with an obligation upon importers to
participate in those systems.
Yet another set of policy-makers would prefer to
focus on what is most immediately “deliverable” by the trading system in
terms of the fight against climate change. And by this, they mean the
opening of markets to environmental goods and services; in particular to
those that are relevant to climate change, through the ongoing Doha Round of
trade negotiations. And, indeed, with them, I would agree.
These are but some of the ways in which some would
position the multilateral trading system on the issue of climate change.
Personally, I am of the firm conviction that the relationship between
international trade — and indeed the WTO — and climate change, would be best
defined by a consensual international accord on climate change that
successfully embraces all major polluters.
In other words, until a truly global consensus
emerges on how best to tackle the issue of climate change, WTO Members will
continue to hold different views on what the multilateral trading system can
and must do on this subject. It is only consensual international accord that
can take them forward. And this must now be our focus as we march towards
In the absence of such an agreement, some may be
tempted to embark on what I would refer to as “mission impossible”: trying
to unilaterally fix a global environmental problem through trade measures.
But global problems seldom lend themselves to unilateral fixes, and trade
measures may not be the most appropriate response. Ultimately, the
fundamental question which the international community must answer is: who
will reduce emissions, and by how much. This, while respecting the principle
of ”common but differentiated responsibility.“
I am also of the view that the international
trading system's carbon footprint must be examined with caution. Much is
said in the press everyday about the carbon footprint of international
transportation. In fact, a new and emerging concept is that of “food miles.”
In other words, the desire of consumers in certain countries to calculate
the carbon emitted in the course of international transportation, with many
already drawing the conclusion that it may be better to “simply produce
goods at home” to minimize emissions.
But such arguments may not always stand up to
empirical verification. In fact, 90% of internationally traded goods are
carried by sea. And maritime transport is one of the most carbon-efficient
modes of transport, with only 14 grams of CO2 emissions per ton kilometre.
Furthermore various studies that have looked at the entire life-cycle of
products have found that internationally traded goods sometimes carry lower
carbon footprints than products that are locally-produced. This is not a
surprise in the area of agriculture, for example, where much agricultural
production in the North takes place in high carbon-footprint,
energy-intensive, greenhouses. Having said that, bunker fuels may come under
the purview of post-Kyoto climate regime, thereby internalizing negative
It is also my hope that countries will put the
trade agenda to the service of climate agenda through one of the most
obvious ways possible, and in an area in which the internationally community
already has a political mandate. I am referring here to the opening of trade
to environmentally-friendly goods and services in the context of the Doha
Round. At the moment, many climate adaptation and mitigation technologies
are on the negotiating table, whose exports in recent years has totalled
$165 billion. They include goods such as wind turbines, solar cooking
appliances, and photovoltaic cells. We must make this technology more
accessible to all.
Let us not lose time in our fight against climate
change. Let us put trade to the service of the international climate agenda,
focussing now on making Copenhagen happen.
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