This paper analyses the existing legal frameworks within which a possible Sustainable Energy Trade Agreement (SETA) could be negotiated to address energy-related trade governance and the resulting legal challenges and opportunities. It looks at a number of options under which a SETA could be given legal shape within and outside the World Trade Organisation (WTO) and assesses the pros and cons of the various approaches. It touches on a number of important considerations, such as the negotiating procedures, issues of accession, relationship to existing WTO rules and obligations, and dispute settlement. The paper also puts forward arguments as to why the WTO would provide the best forum to house such an agreement. The paper, produced by the International Centre for Trade and Sustainable Development (ICTSD), is part of a joint initiative on the promotion of sustainable energy, undertaken by the Global Green Growth Institute, the Peterson Institute for International Economics and ICTSD.
This summary was prepared by Eldis.
Intended to inform decision-makers in the public, private and third sectors, this policy paper finds that following a two degrees Celsius path requires radical action in both developed and developing countries and that the overall pace of change is ‘recklessly slow’. According to the authors, the transition to a low carbon and resource-efficient economy should be based on equitable access to sustainable development, as well as recognition that rich countries have a responsibility to support the transition of developing countries. This transition will involve breaking the link between growth and emissions, but not stop growth. The authors emphasise that accelerating the pace of change towards a low carbon, resource-efficient economy is both feasible and crucial, and that rapid transformative change is possible with the right incentives.
The authors criticise the rigidity of the processes under the United Nations Framework Convention on Climate Change (UNFCCC), as well as the behaviour and narrow-mindedness of the participants hindering progress. Additionally, they highlight the power that vested interests continue to have. Conclusions include the following:
The government as an entity is quite often the largest, single consumer of goods and services in developed as well as developing countries. Government procurement can be a powerful tool for positive environmental change by creating a market for environmental goods and services. At the same time, procurement policies will need to be designed and implemented in a manner that does not discriminate against trading partners. What sort of space is available in the context of existing trade-rules for governments to pursue proactive procurement policies for sustainable energy goods and services? Is there a need to review existing rules so as to enhance their effectiveness with regards to the objectives of strengthening markets for renewable energy? This paper, by Alan Herve and David Luff, sheds light on these questions and also explains how a possible Sustainable Energy Trade Agreement could spur reform while ensuring a level playing field in procurement markets for producers of sustainable energy goods and services worldwide.
"Ecosystem services" has become a catch-phrase for the complex connections between the natural environment and human well-being. This paper considers the impact of changes in the supply of ecosystem services, and programs to increase their supply, on near-term growth of gross domestic product. It focuses on the relationship between locally generated versus transboundary services and growth in developing countries, where the highest rates of ecosystem degradation tend to be found. There is a common perception that there is a tradeoff between environmental protection and economic growth, especially in the near term. This perception can make policymakers reluctant to support environmental protection. Where the environment is a source of economically important services, then environmental protection may stimulate growth of gross domestic product instead of reducing it. The paper considers evidence on the economic value of regulating services; the degree to which ecosystems actually supply some of the services they are commonly assumed to supply; and the near-term growth implications of restoring ecosystems, and reducing their loss.