Are trade agreements good or bad for the climate?

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Written by Susanne Dröge and Harro van Asselt

Friday, 28 October 2016 00:00

SEI 2016 blog Trade climateThe Lica Maersk at the Lyttelton Port of Christchurch in New Zealand. Bernard Spragg / Flickr

Trade deals and the World Trade Organization are widely seen as detrimental to climate mitigation efforts, but they also have the potential to foster trade in climate-friendly goods and diffuse climate protection rules.

Regional trade deals are often met with negativity by green groups because of potential contradictions with climate policy. And some World Trade Organization (WTO) rules may be seen as hampering emission reductions.

But rather than focusing solely on what is wrong with the trade system, the debate should also focus on how governments could try to shape trade agreements to meet the goals of the Paris Agreement.

In our recent report for the Climate Strategies network we have analysed a number of options. Governments could ensure climate objectives are considered a legitimate departure from trade rules. They could also agree to facilitate trade in climate-friendly goods and services. And they could strengthen transparency on climate-related trade measures.

There are legitimate concerns about the Trans-Pacific Partnership (TPP), the Comprehensive Economic and Trade Agreement (CETA) and the Transatlantic Trade and Investment Partnership (TTIP), particularly on investor-state dispute settlement systems.

Yet regional trade agreements can also include provisions on climate and environmental protection. Trade deals between industrialized countries often focus on reducing regulatory costs by aligning standards, as tariff rates are already low. So these trade deals do have the potential to diffuse climate protection rules more widely, which would prevent the regulatory race to the bottom that many environmental organizations fear.

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Download the paper on which this post is based (external link to Climate Strategies)

Source: Carbon Brief, UK
Language: English


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