Current Issues Surrounding the Trade and Climate Change Interface

Abstract

The interface between trade and climate change is a complex issue though institutionally both the WTO and the UNFCCC are mutually supportive and leave sufficient policy space for one another in their respective operation. In this paper, three issues viz. carbon leakage and the border issue; the problem of unilateral trade measures; and finally, the issue of technology transfer and IPRs have been discussed. While the first two issues show how climate mitigation arises conflict within the WTO system, the third issue will discuss just the reverse, i.e. how the trade and technology transfer could arise conflict in international climate talks. The reason why trade intersects with climate change is due to the numerous implications that climate change may have in terms of its potential impacts and the intense regulatory and economic changes that are required to mitigate and adapt to these impacts. Hence, there is an intense need for a successful conclusion to the current negotiations on both climate change and trade. The paper concludes by saying that a successful conclusion of the WTO negotiations on trade liberalization will definitely help improve access to climate-friendly goods and technologies which are a pre-requisite to address climate change concerns. On the other hand, a successful round of the UNFCCC negotiations is likely to promote a supportive and open international economic system that would lead to sustainable economic growth and development thereby addressing the problems of climate change better.