Climate Change and Clean Energy Technologies: Policy Options for the Global Trade and Investment System

Climate action has been recognised as an overarching priority of the international community in the Paris Agreement of the UNFCCC as well as in the UN Sustainable Development Goals. The recent decision of the United States to withdraw from the Paris Agreement seems to have strengthened the resolve of other signatories of the agreement to fulfill their commitments. At the same time, it has enhanced the need to strengthen international responses to climate action through all possible means.

Trade policy is one area which could make a difference for climate action. To begin with, trade is vital for ensuring that clean energy technologies are available on a global level, in particular as manufacturing remains largely concentrated in a few producer countries. In a similar vein, carefully designed trade policies could help ensure that products with a low emissions intensity are available globally. Moreover, the trade system must be supportive, and not stand in the way, for countries’ responses to climate change, be it carbon pricing, energy efficiency standards or labels. At the same time, it must be acknowledged that there are also possible tensions between trade and climate change – one country’s efforts to stem emissions may reduce demand for imports from another country, or affect the competitiveness of its own firms compared to industries in other countries.

In order to ensure that trade is enabled to play a role which facilitates and scales up climate action, while acknowledging and addressing the possible tensions, ICTSD, together with the Chatham House, Climate Strategies and the Friedrich Ebert Stiftung, has taken a fresh look at the intersection between trade, climate and clean energy under the E15 Initiative. This session will present a selection of the findings from that effort and discuss policy options for decision makers in trade, investment and climate change in the context of the post-Paris world.