A rapid scale-up and deployment of environmentally-friendly energy technologies, as well as a strengthening of energy efficiency are crucial for responding to the challenges of climate change.
Reducing barriers to trade in relevant technologies can contribute to considerable cost savings and can therefore play an important role in supporting climate action. Removing tariffs could have a particularly positive effect on the clean energy sector, where the hundreds of components that are required to build wind mills or solar panels cross many borders.
The benefits of such efforts to climate mitigation would be global. Research shows that removing tariffs on environmentally-friendly technologies would have a positive impact on emissions reductions, particularly if combined with the removal of other trade obstacles.
In this context, a unique trade agreement, the Environmental Goods Agreement (EGA), is being negotiated between more than 40 countries, including many of the world’s largest producers of clean energy technologies. The deal, which may conclude as early as December 2015, will result in improved global access to cheaper, more competitive climate relevant technologies, therefore contributing to climate action. Participants in the EGA discussions have explicitly stated their ambition to contribute to the work of the UNFCCC in combating climate change and transitioning to a green economy.
Beyond the EGA, there are many more possible options for trade forming part of a comprehensive response to the challenge of climate change. In particular, it will be necessary to address a range of behind the border issues which the industry faces when operating on the global value chains that are typical for many climate-friendly goods. It may also be necessary to revisit the global frameworks to ensure that these are supportive to the trade- climate interface which spurs effective climate action.
This event, organised by the International Centre for Trade and Sustainable Development (ICTSD) and the National Foreign Trade Council (NFTC), brought together stakeholders from industry, think tanks, academia and IGOs for an interactive and dynamic event. It provided an overview and analysis of the climate-relevance of the EGA and put this in the broader context of what trade can do for climate action. Discussions highlighted in particular benefits of the EGA, as well as issues that would require the attention of policy makers in a next phase, after an initial EGA is concluded.
The event took place on Monday, 7 December from 14:30-17:00 in the IETA & WBCSD Business Hub (Hall 3 No. 4).