Trade and climate change

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environmental goods covered by the US and EU proposal totalled about $613 billion in 2006, and global exports of these goods have grown annually by an average of 15% since 2000. WTO members currently charge duties as high as 70% on certain environmental goods, impeding access to and use of these important technologies.

Schwab quotes a recent World Bank study on climate and clean energy technologies that suggests that by removing tariffs and non-tariff barriers to key technologies, trade could increase by an additional 7-14% annually.

This push in the long-running Doha Round of world trade talks came as delegates from about 190 nations are participating in a meet in Bali, Indonesia, from December 3 to 14, to try to launch separate negotiations on a new pact to deal with climate change. The goal is craft a successor to the United Nations’ Kyoto Protocol, which binds 36 industrial nations to cut greenhouse gas emissions by 5% below 1990 levels by 2008-12.

The US, of course, rejected Kyoto. But other rich nations have less than a month before they must start meeting emissions caps under the Kyoto Protocol to fight global warming. Yet, 16 of the 36 nations bound by Kyoto’s limits are over their targets set for 2008-2012, and will have to buy carbon offsets to meet these, drawing criticism at the ongoing UN meeting at Bali.

According to the environment and forests ministry, India’s per capita energy consumption is below 500 kg of oil equivalent (kgoe), as against the global average of about 1,800 kgoe. Also, the country’s per capita carbon dioxide emissions are about 1 tonne per annum, compared to the world average of 4 tonne per annum.

Given those numbers, India and China can hardly be considered the most worrisome source of greenhouse gas emissions, as contended by the US and EU. The fact remains that the US produces 20% of all pollutants that contribute to global warming, and India only 4%, which will further be reduced as India is taking strong measures in afforestation and other areas required for the protection of the environment.

However, the proposal of the US and EU to cut TBT vis-a-vis a specific set of climate-friendly technologies with a higher level of commitments on the part of the developed and advanced developing countries, is welcome.

The author is trade professor, Icfai Business School, Chandigarh.