Trade and Climate Change

In their policy paper for the Friedrich-Ebert-Foundation’s Dialogue on Globalization section, Nils Meyer-Ohlendorf and Christiane Gerstetter of Ecologic Legal, shed light at the most important aspects of the relationship between trade and climate change policies. They investigate which trade-related policies should be adopted to combat climate change and review the compatibility of those measures with the law of the World Trade Organization (WTO). Particular attention is given to issues that are of relevance to developing countries. The first focus of the paper is on the transfer of climate-friendly technologies to developing countries.

The international climate agreements contain obligations for developed countries to engage in transfer of technology – in practice, level of technology transfer are insufficient, however. WTO norms on the protection of intellectual property are not the main reason for this, however. Factors such as the lack of adequate funding are more important, in contrast.

A second focus of the paper is on the politically contested issue of border adjustment measures. In several industrialized countries, there are ongoing debates if such trade measures should be adopted in order to prevent relocation of emission-intensive industries to countries with lower environmental standards. The authors conclude, however, that such measures are only a second-best option for combating climate change, even though they may be compatible with WTO law, depending on how they are tailored.

In sum, according to the paper, WTO law offers flexibilities that may be used for adopting trade measures to combat climate change – provided that there is a political will to do so. 
 
The paper [pdf, 1.16 MB, English] is available from the website of the Friedrich Ebert Foundation’s Dialogue on Globalization.