Trade and investment tools for a low carbon future

20 July 2015

In September, world leaders are expected to adopt a post-2015 development agenda, geared towards ushering in a new set of sustainable development priorities for governments, civil society, and business. Moving to a more sustainable energy mix is a part of this new growth paradigm and, at the same time, poses a particular challenge.

Energy is the lifeblood of the global economy, as well as international trade, and is vital to securing many daily necessities. Global energy demand is expected to increase by 37 percent to 2040 under planned policies, according to the International Energy Agency. The energy supply sector and its continued heavy use of fossil fuels is, however, largely responsible for over a third of annual climate warming greenhouse gas emissions. Meanwhile, last year UN climate scientists estimated the world had used 52 percent of a “carbon budget” required to keep temperatures below a two degree Celsius rise from pre-industrial levels, and that the remainder would be spent in the next 30 years under current trends.

A chorus of stakeholders have warned that a fundamental scale up of clean energy is required to meet the future energy needs of all – including the 1.3 billion people around the world who continue to lack access to electricity – and stay within the limits of a healthy planet. Experts eyeing a pivotal UN climate conference in December have also called for a hike in energy-related emissions cuts as part of countries’ individual climate action plans.

On a positive note, a recent REN21 report found that renewables represented approximately 59 percent of net additions to global power capacity in 2014, and supplied an estimated 22.8 percent of global electricity production. Last year was also the first time in 40 years, outside a period of economic shock, when the global economy grew while energy-related carbon dioxide emissions stayed flat.

Trade and investment have a role to play in scaling up clean energy. Lower tariffs and open markets for clean energy goods can help boost their deployment, while also diffusing key technologies and services. International investment adds to the resources needed for countries to make the sustainable energy shift. Tackling fossil fuel subsidies, which distort production in a global marketplace and send the wrong signals from a climate perspective, is critical.

The articles in this issue focus on possible trade and investment tools required to meet global sustainable energy needs, barriers to clean energy trade and investment, and energy subsidy rules at the WTO. The links between trade, investment, and energy are many. How to ensure these are harnessed to secure a low carbon future?

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The BioRes Team

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20 July 2015
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