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Change trade, not our climate

Global trade rules are stacked in favour of a poor deal for the climate, argues Ronnie Hall

December 7, 2009
5 min read

Government negotiators have jetted in to Copenhagen primed for fractious, coffee-fuelled all-night negotiations, as each country battles to reach some kind of face-saving deal that sounds far-reaching and progressive, but won’t damage its own economy. All involved claim to be worried about the possibility that talks might collapse: but would a deal, any deal, be better than nothing?

The answer is a resounding No! Because while the world watches and waits, praying that governments can conjure up a last minute reprieve from the impending threat of climate change, officials from the very same governments prioritise short-term trade concerns in the international arena … stacking the rules in favour of trade and against climate.

Iinternational trade and investment agreements already drive the overall growth of energy-intensive industrial sectors, the continued extraction and processing of fossil fuels, and the expansion of intensive agriculture. Yet World Trade Organisation (WTO) rules prohibit any differentiation between climate-friendly and climate threatening sectors – if it’s based on production and processing methods.

The same rules also place severe constraints on what governments can actually do to promote low-carbon alternatives or help people adapt to climate change. Rules on intellectual property rights, for example, push up the cost of climate-friendly technologies, making it that much harder for developing countries to switch to sustainable low-carbon technologies and climate-resilient development. Rules on the patenting of life forms could also prevent farmers adapting food production to climate change, with severe implications for food security. There are even rules on subsidies that could stop governments providing financial support for the development of climate-friendly fuels or technologies. A ‘Doha’ deal could even lead to the removal of national energy efficiency laws already in place.

This simmering tension between the worlds of trade and climate change also creates a chilling effect on the development of new climate change policy measures: governments become reluctant to introduce any national measures that might be challenged through the trade system. Many multilateral environmental agreements even have built-in trade loopholes: the UN Framework Convention on Climate Change (UNFCCC) and the Kyoto Protocol, for example, have wording explicitly advising against measures or ‘disguised restrictions’ on international trade.

Energy security concerns are clearly at the heart of many current trade negotiations too. The EU, the US and others are trying to use the WTO to remove international trade restrictions on energy service companies. Japan is seeking to include ‘energy security’ clauses in a potential bilateral agreement with Australia, in order to maintain access to Australia’s coal resources.

Shades of green

Beyond trade rules, governments’ fixation with maintaining economies’ and industries’ competitiveness in an increasingly tough globalised economy also presents a major hurdle to implementing climate change mitigation policies. As countries have progressively engaged in international trade, they have also become more dependent upon it. As a result, governments are ever more reluctant to introduce costly climate-friendly policies, such as carbon taxes, on the basis that these could place their domestic industries at a disadvantage (by increasing their operating costs compared to those of their foreign competitors). But this argument doesn’t hold much water: G20 countries are currently spending something in the order of US$300 billion every year subsidising the use of fossil fuels.

The current free trade stranglehold over economic policy means that governments have also chosen to prioritise business-friendly solutions to climate change, rather than opting for more effective and predictable regulatory options. This means we are already banking heavily on the success of a number of highly uncertain false solutions that minimise inconvenience to, or even benefit, industry. These include voluntary certification and labelling systems, which are favoured precisely because they have minimal impacts on trade, are not designed to address excessive consumption, and can lend a very pleasant shade of green to company profiles.

Governments urgently need to refocus trade and investment to actively promote the use of sustainable energy, by stopping trade and investment negotiations and agreements that promote energy-intensive industries. They need to redirect their efforts – and the very substantial public subsidies currently allocated to the fossil fuel and agrofuel sectors – into developing and implementing sustainable clean, renewable, locally-controlled and low-impact energy resources and technologies, based on the principle of energy sovereignty. It’s also critical that we stop overproduction and overconsumption.

If we are to avoid the worst impacts of climate change, we need to move away from neoliberal economics. We need a coherent, practical, and fair rights-based framework that prioritises long-term climate change concerns over short-term trade interests, and puts the long-term health of the planet and the well-being of all its people first. If we don’t change the rules of the global economy, it’s most unlikely we will stop runaway climate change.

This article is based on Ronnie Hall’s Change trade, not our climate!, a new publication from the Our World Is Not For Sale network

This article is republished from Climate Chronicle

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