Bridges Trade BioRes • Volume 5 • Number 21 • 25th November 2005

To Bind or Not to Bind: Climate Change Meeting Considers Future

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Between 28 November and 9 December, the future of the United Nations Framework Convention on Climate Change and whether binding targets for cuts in emissions should be continued will be taken up at the Eleventh Conference of the Parties (COP-11) to the Convention in Montreal, Canada. The first Meeting of the Parties to the Kyoto Protocol (COP/MOP-1), which will be held at the same time, will mark the start of critical negotiations on how efforts to address climate change will move ahead after 2012, when the first phase of the Kyoto Protocol ends. Under the Protocol, which entered into force in February of this year, about 40 developed countries have committed to cutting emissions of heat-trapping carbon dioxide by 5.2 percent below 1990 levels by 2008-12. The recent accession of Saudi Arabia has raised the profile of the Protocol in the WTO, as Members consider that the impact of emissions reduction targets on competitiveness and the nature of the energy sector in energy-producing countries could become more important in trade negotiations in the future as more of these countries join the WTO and are impacted by the Protocol. The political emphasis given to climate change abatement in the Kyoto Protocol and its successor could also legitimise calls for including energy-reducing technologies as an environmental good in negotiations in the Committee on Trade and Environment Special Session (CTE-SS).

In addition, European Parliament representatives have raised the question of whether countries that do not sign onto the Kyoto Protocol’s binding limits are effectively giving their businesses a subsidy which could be subject to redress in the form of countervailing duties or border tax adjustments under WTO rules (see Bridges Trade BioRes, 18 March 2005). They argued that since countries, including those in the EU, have to bear costs for climate abatement measures (such as technologies that reduce emissions) which in turn have impacts on competitiveness, there should be border adjustment measures to account for imports of products that are produced in a climate-unfriendly way without internalising the environmental costs. However, the EU has for the time being decided against raising the issue in the WTO and has not described how such measures could work, and the possibility of instilling such rules under the WTO or UNFCCC in the contentious new post-2012 regime will likely be undermined by the US disinterest in signing onto the Protocol or a successor agreement with binding targets. Instead, the US prefers to focus on technological development without committing to binding targets — something environmental groups have said is ineffective with regard to achieving serious emissions reductions. The US has also launched a voluntary, multi-national plan to sequester and store carbon dioxide.

ICTSD reporting; “Nations set to feud over new global warming plan,” REUTERS, New York Times, 22 November 2005; “Bid for Second Phase of Kyoto Faces Major Battle,” REUTERS, 22 November 2005; “Britain opens way for new climate deal,” OBSERVER, 20 November 2005; “India Unlikely to Agree to Kyoto Emission Caps,” REUTERS, 18 November 2005; “US to Push at UN Meeting for Voluntary Carbon Plan,” REUTERS, 17 November 2005.