http://ictsd.org/i/news/bridgesweekly/114956/
Climate change measures with trade implications continue to create friction during negotiations taking place in Panama City, Panama this week as part of the final preparations for December's United Nations Framework Convention on Climate Change (UNFCCC) Conference of the Parties (COP). Two major areas of discussion have already spurred countries to come forth with strongly-worded proposals in efforts to safeguard trade and economic development. The first relates to the possible negative impacts of unilateral measures taken to address climate change; the second relates to global sectoral approaches to mitigate emissions.
A proliferation of response measures
One area of contention is the issue of the potential consequences that measures taken by a country to address climate change could have on developing countries. So-called "response measures," as they are referred to in international climate negotiations, are policies or programmes that countries implement in order to reduce their carbon emissions, such as establishing emissions trading schemes. The topic was also the subject of intense debate last month at a UNFCCC meeting in Bonn (see Bridges Weekly, 21 September 2011).
Response measures are being discussed under various negotiating tracks, which in itself has prompted disagreements about efficiency and effectiveness.
Those who favour the various-track approach emphasise that each discussion has a different purpose. One such purpose is to complete a work programme and discuss the potential continuation of a forum for an exchange of views at the year's end climate COP in Durban, South Africa. .
Some parties - especially developing countries - favour a permanent forum as a means for parties to report and evaluate the impacts and consequences of policies and measures to address climate change. However, most developed country parties consider that the existing channels for reporting - which include national communications - are sufficient.
Notably, there is no standard form for such communications, nor are there specifics on how to report. The result is that each developed country reports in different ways with different details and with varying levels of explanation. Furthermore, remarked a delegate during negotiations, these reports are ex-post, where a process is necessary, rather than ex-ante, which some argue would be necessary in order to avoid or mitigate impacts.
Trade measures to address climate particularly contentious
In a separate response measures discussion under the negotiations for Long-term Cooperative Action (LCA) - the process geared toward producing a new agreement to bring the US and other major developing country economies into the game in a more meaningful manner - a group of developing country parties have proposed text for decision in Durban that intends to protect them from unilateral measures, such as trade restrictions, in the name of climate change. The proposal seeks to prevent developed country parties from measures "including tariff, non-tariff, and other fiscal and non-fiscal border trade measures against goods and services from developing country Parties on any grounds related to climate change."
This is an area of great concern for developing countries, particularly following draft legislation in the US and discussions in Europe over the past years to impose border taxes for imported goods with higher emissions than nationally produced goods.
Sectoral approaches for climate strike a nerve with trade
In separate discussion on sectoral approaches to mitigating climate change, there is divisive debate on whether to include a general framework for all sectors or to simply negotiate text sector by sector. Well-elaborated draft texts exist on the agriculture and international aviation and maritime transport sectors.
Developing countries supporting a framework are seeking principles and safeguards for these and future sectors, such as energy, if and when they arise. Some developed countries find a general framework unnecessary and wish to only negotiate on the specific sectors.
Several prominent developing countries have tabled a proposal with specific protections regarding international trade. In the proposal, the countries affirm "that co-operative sectoral approaches and sector-specific actions shall not constitute a means of arbitrary or unjustifiable discrimination or a disguised restriction on international trade, more specifically on the trade from developing country Parties."
The countries also ask that "co-operative sectoral approaches and sector-specific actions... take fully into account differences in geographic, economic and social conditions and specific national development priorities and circumstances."
Coming up this week
Discussions continue this week on related issues, such as the development of market and non-market mechanisms for addressing climate change - including a formal EU proposal for a market-based mechanism to promote projects in developing countries - that could have bearing on the current carbon markets and investments (see Bridges Trade BioRes, 3 October 2011).
Two other topics that countries hope to draft text for further discussion and agreement in Durban include the new Technology Mechanism and the new Carbon Fund. In the case of the former, the discussion includes a debate on intellectual property rights; with regards to the latter, the discussion is centred on a proposed levy on international transport in order to raise funds for adaptation in the countries that will be the hardest hit by climate change.
The upcoming issue of Bridges will include an update on the outcome of the trade issues in this week's talks.