Towards a green economy

tariff and non-tariff barriers on environmental goods and services. A World Bank study found that

trade

liberalisation could result in a 7 to 13 per cent increase in trade volumes in these goods (World Bank 2007). Likewise, the ongoing negotiations to liberalise trade in agriculture could yield green economy benefits. These negotiations are expected to lead to a reduction in agricultural subsidies in some developed countries that should stimulate more efficient and sustainable agricultural production in developing countries. It is essential, nonetheless, that developing countries are supported through capacity building to fully exploit the potential gains from trade liberalization (see Box 11).

The trade rules governing intellectual property rights (IPRs) and the use of standards and labeling by governments have important implications for the transition to a green economy. Rules regarding the enforcement of IPRs are included in most modern trade agreements. Proponents of strong IPR rules argue that they can help foster a green economic transition by providing incentives for innovators, who can be more certain that their investment in R&D will be rewarded. This is particularly important at a time when new clean technologies are urgently needed; it has been estimated that almost 36 per cent of the reductions in carbon emissions needed by 2020 could be achieved through the application of new technologies in the energy, transport, buildings and industry sectors (Tomlinson 2009).

On the other hand, IPRs create barriers to the transfer of the very technologies and innovations to which

they give rise. Although the WTO Agreement on Trade- Related Aspects of Intellectual Property Rights (TRIPS) was designed to take into account the need for balance between innovation and dissemination, noting the need for “maximum flexibility” with regard to least- developed country Members, many sector chapters in this report identify IPRs as an important barrier to the development of green markets. Moreover, some studies note that the TRIPS Agreement has come under criticism for failing to adequately serve the needs of developing countries (Foray 2009).

The use of standards and voluntary labeling schemes is another trade-related area of importance from a green economy perspective. Such tools can be effective for achieving environmental objectives and enabling markets in sustainable goods and services by informing consumers about products and production processes. In the manufacturing sector, for example, standards often “push” the market by requiring manufacturers to meet minimum guidelines, and these are often complemented by voluntary eco-labelling schemes to “pull” the market by providing consumers with relevant information to make informed purchasing decisions. The Forest Stewardship Council (FSC), for example, provides internationally recognised standard-setting, trademark assurance and accreditation services for companies, organisations and communities. The Forests chapter identifies certification as having the largest influence on forest policy over the last decade. Similarly, the Marine Stewardship Council (MSC) recognises and rewards sustainable fishing by working with fisheries and commercial partners to give

Box 11: Trade-related capacity building

Trade is considered to be one of the major global engines of development, and the sector chapters in this report identify many ways that the trade system can facilitate green markets, from enabling the more efficient use of resources to the transfer of important technologies. But one of the greatest criticisms of the trade system is that many countries lack the capacity that would let them take advantage of these potential gains. There is, however, an existing model that has been designed to address these challenges: the Integrated Framework for Trade-Related Technical Assistance to Least-Developed Countries, or simply, the IF.

The IF – now the enhanced IF – was inaugurated in 1997 at the WTO High Level Meeting on Integrated Initiatives for Least-Developed Countries’ Trade Development, and involves a collaboration of the IMF, the International Trade Centre (ITC), United Nations Conference on Trade and Development

(UNCTAD), United Nations Development Programme (UNDP), World Bank and WTO.

The IF involves a diagnostic phase, where the host country government works in close cooperation with technical experts to identify barriers to increased integration into the global trading system. The resulting diagnostic trade integration studies (DTIS) not only identify challenges but also solutions. Typical solutions include policy changes, such as new laws and regulations; investments in infrastructure, such as new transportation corridors, customs facilities and equipment; or skills capacity building, such as training for trade negotiators. The host country then prioritises those elements of the DTIS that most closely fit with national priorities, mainstreaming the recommendations in their national development planning. Source: IF Secretariat (2009)

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