This paper reviews the challenges and opportunities raised by international trade for developing countries considering a green growth strategy. A key concern is the effect of environmental policies on international competitiveness. For production-generated pollution, there is evidence that stringent environmental policy reduces some indicators of competitiveness, but the effect is small in most sectors. However, tightening up environmental standards is unlikely to reduce international competitiveness when pollution is generated by consumption. And where depletion of natural capital is a threat, effective environmental policy is an important component of a policy aimed at developing long-run international competitiveness. The effects of trade on environmental policy, the interaction between trade and technology transfer, and the interaction between trade and transboundary environmental problems are also reviewed. An emerging issue is the potential use of border taxes to curtail carbon leakage. The paper discusses some of the possible responses by developing countries.
Transportation is vital to economic and social development, but at the same time generates undesired consequences on local, regional, and global scales. One of the largest challenges is the mitigation of energy-related carbon dioxide emissions, to which this sector already contributes one-quarter globally and one-third in the United States. Technology measures are the prerequisite for drastically mitigating energy use and all emission species, but they are not sufficient. The resulting need for complementing technology measures with behavioral change policies contrasts sharply with the analyses carried out by virtually all energy / economy / environment (E3) models, given their focus on pure technology-based solutions. This paper addresses the challenges for E3 models to simulate behavioral changes in transportation. A survey of 13 major models concludes that especially hybrid energy models would already be capable of simulating some behavioral change policies, most notably the imposition of the full marginal societal costs of transportation.
This paper reviews dynamic general equilibrium models in order to collect insights on the interaction between economic growth and environmental issues. The authors discuss the Ramsey model and extend it for natural resource inputs and pollution, as well as for endogenous technical change. Green growth becomes within reach if there is good substitution, a clean backstop technology, a small share of natural resources in gross domestic product, and/or green directed technical change.
What kind of clean-energy support measures can be maintained under international trade rules and what cannot? Policy certainty reflected within a clear and coherent trade and energy governance regime is critical for boosting investor confidence and fostering clean energy investments. Ambiguity on clean energy support measures within WTO rules could cast a chilling effect on domestic efforts to scale up sustainable energy. One way of dispelling such ambiguity is through a possible sustainable energy trade agreement (SETA). This paper emphasises the importance of understanding what are the types of clean energy subsidies countries usually provide, why countries provide them, and how they fit into existing legal mechanisms. A SETA, by simultaneously addressing these questions and clarifying existing WTO subsidy rules, would add to the certainty and predictability of a country’s trade and investment climate.
This paper, written for the United Nations High-Level Panel of Eminent Persons, seeks to 1) Explain the relationship between the sustainable development, green economy and green growth concepts; 2) Summarize the state of knowledge regarding the feasibility and ultimate potential of green growth; and 3) Recommend how the post-2015 international development cooperation agenda could be structured to maximize the contribution of green growth to sustainable development over the next two crucial decades.