Description
Climate
change policies aimed at controlling emissions of greenhouse gases
(GHG) are leading to realignment in the production and consumption
of goods and services across the world. As Annex I Parties to
the Kyoto Protocol are taking various measures ranging from tightening
of energy efficiency standards, carbon cap-and-trade programmes,
and carbon taxes, concerns have been raised that industries in
these countries will find themselves at a disadvantageous position
vis-à-vis countries where such mandatory measures are not implemented.
There is growing fear that this may lead to "carbon leakage" and
industrial relocation from OECD to non-OECD countries, especially
for energy-intensive industries, such as steel, cement and chemicals.
In the context of international trade, there are concerns that
countries implementing stringent climate change policies will
have to compete with exports from countries where costs of production
may be lowered as a result of the absence of mandatory emission
reductions on producers. These concerns have prompted calls within
industry as well as by politicians for the introduction of measures,
including trade measures, to offset competitive imbalances and
level the playing field. Rhetoric over the use of border tax adjustments
and measures with similar effects has particularly been prominent
in this regard.
While
the imposition of energy efficiency standards and carbon tax measures
on imports have attracted much attention among policy-makers and
politicians, little information exists on the economics of such
measures and their actual effects on competitiveness and international
trade. Similarly, it is not clear to what extent climate policies
in industrialised countries are leading to carbon leakage and
industrial relocation. So far the debate has been mostly based
on rhetoric and perceptions of negative impacts on the competitiveness
of countries pursuing ambitious climate change policies. There
is a view, and also some emerging evidence, that climate change
policies may not have an overall negative impact on industries
and competitiveness in countries where such measures are implemented.
There is also some indication that climate policies may have contributed
to driving innovation and increasing resource efficiency, ultimately
fostering competitiveness, both in industrialised and developing
countries.
This
event jointly convened by ICTSD, UNEP and The World Bank, aims
to generate discussion on issues in the trade - climate change
relationship that may impact on global competitiveness. Participants
will review initial empirical insights on the impact of climate
measures such as carbon taxes and energy efficiency measures on
international trade flows and global competitiveness, discuss
some of the initiatives being considered in major economies as
a way to address competitiveness concerns and draw implications
for sustainable development.
