Washington Dialogue Series Trade and Climate Change: Development Aspects of Climate Change Policies of OECD Countries

4th May 2009 • Co-organised with RFF; ENTWINED; ICTSD

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OECD countries are in the process of legislating responses to the challenges posed by climate change. The prospect of rising carbon prices raises concerns in these nations of the impacts on the competitiveness of their own energy intensive industries and the potential for carbon leakage, particularly to emerging economies that lack comparable regulation. As a response, OECD countries are considering incorporating trade-related measures into their climate policies. Some of these have been perceived as potentially harming industries in developing countries while arguably achieving limited results in mitigating total global carbon emissions. Others have been more acute in stating that these trade policy measures are more inclined to protect the competitiveness of domestic industries in OECD countries and, as such, partake the nature of disguised restrictions to trade.

With the assumption into office of the Obama Administration and its renewed prioritization of climate change issues, the United States Congress has ratcheted up deliberations on various bills, such as the Boxer-Lieberman-Warner Climate Security Act (S. 3036) and the Waxman-Markey American Clean Energy and Security Act (draft text). Regulations at the sub-federal or state level are likewise increasingly relevant vis-à-vis federal policies. In the European Union, member economies are preparing the next phase of the ‘Emissions Trading System’ and considering options in the absence of a major international agreement to cap greenhouse gas emissions. Japan, Australia and Canada are also deep into consideration of analogous measures.

Despite the obvious ramifications on their countries’ trade competitiveness and sustainable development aspirations, many developing country trade policy-makers and negotiators remain at the fringe of the climate change debate. An enhanced level of understanding of the different approaches evolving among the key OECD countries is crucial if the various stakeholders are to have an enlightened dialogue on the development implications of OECD countries’ domestic policies to address climate change.

In an effort to bridge the different spheres of knowledge and provide opportunity for an exchange of perspectives, particularly among those who are not often included in similar consultative processes, the International Centre for Trade and Sustainable Development (ICTSD) and the Environment and Trade in a World of Interdependence (ENTWINED) Programme organized a dialogue among select representatives from developing country trade and/or economic ministries, think-tanks and universities, Geneva-based developing country ambassadors and a few OECD member country government representatives. The activity, scheduled on Tuesday, 5 May 2009, was hosted by Resources for the Future (RFF) at the RFF Conference Center in Washington DC. This event was held as a separate and distinct initiative of ICTSD’s Global Platform on Climate Change, Trade Policies and Sustainable Energy but took place in the context of the Washington Dialogue Series slated for the same week. Thru this initiative, ICTSD and ENTWINED hope to:

(i)explore the development aspects of selected OECD countries’ domestic trade policies intended to address climate change, and
(ii)provide a platform for interaction and exchange amongst trade negotiators/policy-makers, private sector representatives, academia and civil society from both OECD as well as developing countries.