Interplay between climate change and world trade policy
This task chart and describes how activities in the multilateral trading regime influences the global climate change regime. The general conclusion from present knowledge of regime interplay on policy instruments (e.g. Petsonk 1999, Werksman and Santoro 2001) is that a friendly co-existence between the UNFCCC, the Kyoto Protocol and WTO rules is possible (Charnovitz 2003, Brewer 2003, 2004). However, adoption of stricter national climate policies, parallel emissions trading schemes (e.g. APEC) and the future evolution in both regimes may increase the potential for conflict in the future. In this task three studies address effectiveness and legitimacy of current and post-Doha interplay between the climate change and the multilateral trading system. This task will be coordinated with the Mistra project Entwined focusing on how the environment is effected by the rules of WTO. The first study will map institutional conditions for designing mechanisms to minimize emissions and economic displacement to make them compatible with the current multilateral trading system. Drawing on WP 1, 2 and 3, it raises the question whetherEuropecan protect its own industries from competition in countries and regions with less stringent greenhouse gas abatement policies. To limit "carbon leakage" into competitors acting in areas with weaker regulation, trade policy measures are likely to be tried, and this may conflict with the multilateral trading system. The second study will scrutinize future policy linkages between climate change and the multilateral trading system through an analysis and mapping of climate policy issues in the negotiations and agreements on agriculture and sustainable development in the Doha round of trade negotiations. Agricultural policies are fundamental for many proposals on mitigation and adaptation. The concept of sustainable development purports to be a meta-goal, and consequently a synergetic link, of both the UNFCCC and WTO (Churie Kallhauge and Van Well 2005). We will systematically structure scientific linkage literature and official negotiation documents to map future policy linkages. Particular attention will be paid to the work in the WTO Committee for Trade and Environment since it may have implications for key climate-related issues through its provisions regarding, e.g. environmental technology, agriculture, eco-labeling and government procurement, and its role in negotiating future issues on trade and environment in the Doha Development Round.The third study will deliver recommendations on promising avenues for positive policy synergies between climate and trade elements, policy instruments and measures. It will discuss the compatibility of a selection of specific elements, policy instruments or measures developed within the climate regime, such as: the compliance mechanism of the Kyoto Protocol; international trade in biofuels; sector based agreements (such as harmonized standards or commitments), “next generation" of flexible mechanisms (such as Sector CDM and Sustainable Development Policies and Measures, SDPAMS); and major sector-transforming technological breakthroughs, such as carbon capture and storage with the multilateral trading system.
