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Trade and Climate Change

Since 1999, IISD has explored the linkages between trade and climate change. Our work continues to focus on defining areas of linkage, and identifying ways in which trade policy might effectively support the objectives of addressing climate change.

IISD is now co-ordinating a two-year collaborative effort or research and analysis to deepen our understanding of six key areas of trade and climate change linkages:

• Liberalization of trade in low-carbon goods
• Border carbon adjustment mechanisms
• Intellectual property rights and technology transfer
• Investment in clean energy technologies
• Fossil fuel subsidy reduction
• Trade law flexibilities for subsidies to address climate change.

This research, which follows on the groundbreaking trade ministerial meeting on the margins of UNFCCC COP-13 in Indonesia, will provide a solid platform for informed policy-making, most immediately in the run up to COP-15 in Copenhagen in 2009. As part of the project, IISD and the International Centre for Trade and Sustainable Development will be coordinating a series of regional workshops in developing countries in the spring of 2009, to identify key developing country concerns and positions in the trade and climate change agenda.

Generous support for the project has been provided by the governments of Norway, Sweden and Finland.

A number of our publications on trade and climate change can be found here, in IISD Publications Centre. IISD's work has also been published outside the Institute; a selection of work not found in the IISD publications Centre is listed below.

• Unpacking the Wonder Tool: Border Charges in Support of Climate Change. Bridges (ICTSD) Vol. 11, no. 7, November-December 2007 (PDF - 81 kb)
  Border tax adjustments and variations on the basic theme have been proposed for years as ways to address competitiveness issues when undertaking climate change policies. This article asks the following questions: Are such measures WTO-legal? Are they administratively feasible? And what would be their broader impacts on the process of international climate change agreement?

• Harnessing Globalization: Scaling Up Trade and Investment Policy's Contribution to Climate Change Efforts (PDF - 115 kb)
  This paper was produced as a scoping document for the Seoul, Santiago and Mexico high-level regional sessions on Scaling Up Clean Investment as part of the Gleneagles Dialogue process, July 2007. It discusses four areas in which trade and investment policy might make contributions to climate change objectives: investment law, environmental goods and services negotiations, non-actionable subsidies for the environment and fossil fuel subsidies.

• Can Private Investment Deliver on MEA Objectives? The Example of the Kyoto Protocol's Clean Development Mechanism
  (PDF - 74 kb)
  This paper was prepared for the OECD workshop Multilateral Environmental Agreements and Private Investment: Promoting Business Contribution to Addressing Global Environmental Problems, Helsinki, June 16–17, 2005. It describes the Kyoto Protocol's CDM as a pioneering experiment to involve the private sector in achieving the objectives of a multilateral environmental agreement.

• Implications, Including for Development, of the Interface between Environment and Trade Policies for Oil Exporting Countries. Geneva: UNCTAD, August 2003 (PDF - 155 kb)
  Chapter 4 of this longer document, extracted here, deals in some depth with the legal interface between trade and investment rules and the types of policies and measures that countries might undertake to address climate change.

• The Kyoto Protocol and the WTO: Report of a seminar organized by IISD and the Royal Institute of International Affairs, December 1, 1999, Seattle. Winnipeg: IISD/Chatham House, 2000 (PDF - 163 kb)
  This is a synopsis of discussions held at a meeting convened on the fringes of the WTO's Seattle Ministerial. The meeting addresses the various ways in which climate change and trade are linked. It concludes that on most issues, there is no immediate threat of clash, provided the potential for clash is understood and addressed.

• Trade Implications of the Kyoto Protocol Policy Matters, newsletter of the IUCN Commission for Environmental, Economic and Social Policy, Issue No. 4, Spring 1999 (PDF - 186 kb)
  This article describes some of the likely areas of conflict between WTO rules and policies and measures that countries might undertake to address climate change.

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