Climate Change, Trade and International Transport: Concerns for SIDS

An ICTSD side event during the 18th session of the UN Commission on Sustainable Development

10th May 2010

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During the special day for Small Island Developing States (SIDS) at the 18th session of the UN Commission on Sustainable Development, ICSTD will organize a side event that is of great importance to both trade and climate change: international transport (aviation and maritime shipping).

While international transport has been a main driver of globalization, trade and development, it also contributes considerably to climate change. While small island developing states (SIDS) need transport for their food security and for their exports, the effects of climate change, particularly a rising sea level, threaten their very existence. The purpose of this side event is to give an overview of the relation between the regulation of international transport (aviation and shipping) in the face of climate change and the impact these policies may have on trade and development.

The side event will build on five segments:
1. The contribution of aviation and shipping to climate change
2. Options for regulating international transport in the face of climate change
3. The effects of regulating emissions from international transport on trade and sustainable development
4. How to offset the impacts of climate regulation on vulnerable countries? What is the role of climate finance?
5. Political issues: how to overcome differences between developed, developing and vulnerable countries on regulating international transport?

After giving an overview of the contribution aviation and shipping make to climate change and the related risks to SIDS, the main options for regulating emissions from international transport will be set out. These options are mostly market-based mechanisms, such as cap-and-trade, levies and energy efficiency indices. The session will give an overview of these tools and other regulatory options.

Next, the session will present an overview of how the proposals for regulating emissions from international maritime transport could affect the costs of maritime transport. It will especially review what the cost effects on trade, competitiveness and food security will be for far-off and trade-intensive nations like SIDS. This segment also identifies the commodities with the largest cost increase.
There are several ways to offset costs of transport climate regulation for vulnerable countries. Several mechanisms such as rebates, route-based exceptions and size threshold will be considered.

Finally, an overview will be given of the attempts to integrate international transport in a wider climate policy framework and of the positions of different countries involved in relevant forums like the IMO, ICAO and UNFCCC. This includes a closer look at current trends in the global governance of international transport and the political economy and principles involved.

Potential contribution to CSD-18:
While most events on transport at CSD 18 are focused on domestic land transport, this event will essentially complement the modes of transport and take it to the truly global level. Aviation and shipping are often called “the ultimate global industries”. Trade is of socio-economic importance to developing countries and international transportation is vital for trade but at the same time, aviation and shipping are the fastest growing contributors to climate change. Thus, this side event will reflect an approach to sustainable development that integrates its economic, social and environmental dimensions. This side event will present multi-stakeholder perspectives on these issues, with views from the private sector, developing and developed countries, and civil society.