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Linking trade, climate change and energy

Produced and edited by Erwin Rose and Moustapha Kamal Gueye

International Centre for Trade and Sustainable Development (ICTSD)

November 2006

SARPN acknowledges the International Centre for Trade and Sustainable Development (ICTSD) as the source of this document:
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Climate change has emerged as one of the greatest threats to sustainable development. While a great deal of attention has been paid to greenhouse gas emissions from energy consumption, very little analytical work has been conducted to explore the impact of international trade flows on global warming and the role of trade policies and international regulatory frameworks as possible solutions. The International Centre for Trade and Sustainable Development (ICTSD) is proud to release this special collection of issue briefs addressing this emerging policy area, produced by ICTSD analysts and a wide range of other contributors on the occasion of the United Nations Climate Change Conference in Nairobi, held 6-17 November 2006.

The global economy is dependent upon oil and other fossil fuels, and this dependency (of producers and consumers alike) is fed through international trade. Weaning ourselves off carbon without causing economic dislocation poses a tremendous challenge. Governments must move quickly to make a rapid transition in the sources of energy on which we rely, whilst balancing social, economic, and environmental concerns.

Reversing global warming requires citizen action and corporate responsibility, public and private investment, and the implementation of effective regulatory regimes. Part of the good news is that, while in the past, the economy vs. environment debate has hampered progress on the environment, many policy-makers now realise that a concerted effort to ensure that economic activity is sustainable is the most cost-effective strategy. A consensus is emerging that technology innovation and transfer can play a major role in protecting the environment while fostering economic development, but achieving the right balance between private and public action is daunting.

Trade liberalisation and the mitigation of and adaptation to climate change are currently managed under separate and complex legal regimes. The integration of these regimes is essential to ensure that domestic and international measures to address climate change and the international trade system are mutually supportive. Infusing climate-friendly measures – including incentives such as climate standards, strategically targeted subsidies and liberalisation in environmental goods and services – within the various trade regimes could make a major contribution toward a sustainable energy transition, and climate change mitigation and adaptation.

This special collection of issue briefs begins with an introduction that summarises ICTSD’s analysis of the key links between three broad areas that are too frequently addressed in isolation from each other: trade, climate change and energy. The second section explains more specifically some of the most important issues facing policy-makers concerned with international policy on energy and trade, including the specific circumstances in Asia and especially China. The final section focuses on bioenergy, looking both at the global picture and at experiences in Africa, Asia and Brazil.

The collection features a contribution by Ted Turner, a leader in the growing movement in support of clean energy and the chairman of the United Nations Foundation. We are also pleased to present other authors from a range of perspectives. Focusing on the potential of biofuels to simultaneously provide economic opportunity and reverse global warming, such new voices set the stage for the issues explored here.

All contributions represent the views of the authors, and do not necessarily reflect the official positions of the organisations with which they are affiliated.

Erwin Rose and Moustapha Kamal Gueye produced and edited this publication. Mr. Rose has served as a senior trade and environment negotiator for the United States. Dr. Gueye leads ICTSD’s environment programme.

This collection builds upon work that ICTSD has initiated on the links between trade, climate change and energy. It inaugurates a new series on Trade and Sustainable Energy that will include publications that address a range of cross-cutting, regional and country-specific topics. We hope you will find these papers to be stimulating, informative and useful. We welcome your comments.

Ricardo Melйndez-Ortiz
Chief Executive, ICTSD

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