Options for Policy-Makers: Addressing Competitiveness, Leakage and Climate Change (PDF - 1.7 MB)
Peter Wooders, Julia Reinaud, Aaron Cosbey, IISD, 2009.
Policy-makers have a number of options when addressing competitiveness and leakage concerns relating to strong climate change actions. This paper identifies the scale of the problem, the options that could be employed to address it and the wide range of impacts those policies could have—economic, environmental, legal and political. It uses empirical information where possible, backing it up with the economic theory needed to analyze the options.
IISD's Bali to Copenhagen project is looking for ways that trade and investment policies might be harnessed to help achieve climate change objectives. Started in June 2008, the project will be running into early 2010, pursuing research across six different thematic areas:
Climate Change, Competitiveness and Leakage
What are the implications of these tools for addressing competitiveness and leakage?
Liberalizing Trade in Low-carbon Goods
Can trade liberalization in low-carbon goods help speed "clean" technology transfer? How might it be done, and what are the sustainable development implications?
Investment and Climate Change
How might international investment agreements foster or frustrate GHG-reducing investments? What barriers at the domestic level need to be addressed, and how to stimulate the immense necessary flows of investment, particularly in developing countries?
Intellectual Property Rights
Are intellectual property rights a barrier to clean technology transfer? What types of policies might be needed to ensure that they are not?
Fossil Fuel Subsidies
What is the contribution to climate change of fossil fuel subsidies, and how can this complex challenge be tackled? (For further information on fossil fuel subsidies, visit IISD's dedicated initiative on subsidies, The Global Subsidies Initiative.)
Subsidies to Address Climate Change
Some climate change policies might be considered subsidies under trade law. What does the law say, and how might we address potential problems?
Research is ongoing in all six areas and will be synthesized in an accessible and concise edited volume. The individual research papers in each area are accessible via the links above.
As part of the Bali to Copenhagen project, IISD convened three regional consultations to ground the research in the concerns of developing countries and to raise awareness in those countries about the key issues.
Bangkok, Thailand, April 30 - May 1, 2009 (International Institute for Trade and Development and the International Centre for Trade and Sustainable Development). See meeting documents here.
Capetown, South Africa, May 7 - 8, 2009 (South African Institute of International Affairs and the International Centre for Trade and Sustainable Development). See meeting documents here.
Rio de Janeiro, Brazil, May 19 – 20, 2009 (Center for Integration and Development Studies and the International Centre for Trade and Sustainable Development). See meeting documents here.
Even the best policy research is useless unless it reaches its target audience. IISD staff have been invited to a significant number of events to share the research results from the Bali to Copenhagen project. As well, IISD has organized or co-organized several events dedicated to sharing those results. A few of IISD's events are highlighted below:
Trade and climate mini-symposium
(December 2009, Copenhagen, COP 15): A round-up of all the Bali to Copenhagen project research to date. Agenda (PDF - 345 KB). Presentations: Low carbon goods: Sugathan, Wooders; Border carbon adjustment: Droge, Werksman, Cosbey; Investment: Neuhoff, Wooders, Nakhooda; IPRs: Lee, Latif.
Competitiveness and leakage
(December 2009, Copenhagen, COP 15): A side event devoted to the issues of competitiveness and leakage, co-organized with ICTSD. Agenda (PDF - 237 KB). Presentations: Wooders (PPT - 475 KB), Cosbey (PPT - 604 KB).
Fossil fuel subsidy reform
(December 2009, Copenhagen, COP 15): A high-level event focused on the possibilities for fossil fuel subsidy reform. Agenda (PDF - 109 KB). Presentations: Callesen, Pizer, Dobbie, Mountford (PPT - 280 KB), Birol.
IPRs and investment: Insights for the negotiations from the trade and climate change body of research
(November 2009, Barcelona, AWG-KP9/AWG-LCA7): A side event at the UNFCCC negotiations, co-organized with ICTSD. Agenda. Presentations: Latif, Sugathan.
Toward international agreement on border measures for climate change: A Global Trade and Development Forum roundtable discussion
(November 2009, Geneva). A round table discussion for low-income-country Geneva missions, focused on border carbon adjustment. Co-organized with the IDEAS Centre. Agenda. Event page. Presentations: Cosbey (PDF - 486 KB), van der Mensbrugghe (PDF - 92 KB), Holmes et al (PDF - 92 KB).
International Trade Experts' meeting
(2009, Toronto). This year's annual meeting of Canadian and international experts on trade focused on trade and climate change. Co-organized with the Centre for Governance Innovation and the Canadian International Council. Agenda.
Linking energy, climate change and WTO law: The role of the WTO in the energy and climate change debate
(June 2009, Geneva). A seminar co-organized with the World Trade Institute, focusing on the legal issues at the cutting edge of trade and climate change, with a particular focus on energy regimes. Agenda (PDF - 137 KB). Event page. Presentations: Cottier (PDF - 50 KB), Marceau (PDF - 105 KB), Wooders (PDF - 230 KB), Selivanova (PDF - 1.3 MB), de Sepibus (PDF - 60 KB), Nartova (PDF - 351 KB), Appleton (PDF - 60 KB), Matteotti (PDF - 40 KB).
Trade and climate change: Competitiveness and leakage issues
(September 2009, Ottawa). An inter-ministerial briefing by IISD on the issues, co-organized with the Department of Foreign Affairs and International Trade. Presentation.
The Bali to Copenhagen project is made possible by generous support from the governments of Denmark, Finland, Norway and Sweden.