Climate change is one of the most pressing problems we face today. Trade policy is a crucial, but often overlooked, tool that can help us address this challenge. A key factor in a transition to sustainable energy alternatives, such as wind turbines and solar panels, is our ability to trade these technologies. Through a liberalisation of green trade, we can make it easier and cheaper to export and import sustainable energy products and services. This can benefit the climate and the environment and also create growth and employment.
Promoting green trade ought to be a main element in discussions on sustainable energy. The potential gains from trade in sustainable energy products and services are substantial but remain unharvested. This is in large part due to the high number of trade barriers that hinder the free flow of sustainable energy solutions across borders. The barriers stem from a ‘governance gap’ in the global architecture of green trade. Due to this, we are far from having an integrated, international approach to green trade. We need to find a framework to get rid of these barriers that stymie our efforts to achieve progress in this area.
Denmark plays a leading role in the EU in advancing green trade liberalisation. During the Danish EU Presidency in 2012, the issue was reintroduced on to the EU’s agenda for the first time since COP15 in Copenhagen in December 2009.
The Danish government has also worked for green trade through the Global Green Growth Forum (3GF), a Danish government initiative to promote public–private cooperation to scale-up green solutions. 3GF has played a key role in supporting the development of the Sustainable Energy Trade Initiative (SETI) and consequently the SETI alliance, hosting meetings and facilitating the network to bring together public and private players. The alliance advocates negotiations to reduce tariffs and non-tariff barriers (NTBs) on sustainable energy products and services.
The good news is that we currently see an increasing international focus on green trade liberalisation. The historical agreement reached at the 9th World Trade Organization (WTO) Ministerial in Bali in December 2013 has given us the possibility to take a fresh look at the WTO, including the possibility to start up initiatives on green trade liberalisation.
This has resulted in the ground-breaking statement made by a number of WTO countries in Davos in January 2014 to pledge to launch negotiations in the WTO on liberalising trade in green goods. This agreement represents an important step forward in the efforts to promote trade in sustainable energy products. The negotiations will build upon the Asia-Pacific Economic Cooperation (APEC) list of green goods agreed on by the APEC countries in September 2012.The broad group of Pacific countries decided to reduce tariffs to 5 per cent or less on fifty-four climate and environmentally friendly products by the end of 2015.
It is now important that the Davos statement results in negotiations on an agreement on green trade liberalisation with a critical mass of participating countries. In the longer run we also, however, need to aim at an even more ambitious agreement. The goal should be a comprehensive international agreement on green trade that goes beyond the APEC Agreement. It should, if possible, also include services. Several options for such a comprehensive international agreement on green trade in goods and services are suggested in this book.
This book seeks to address existing misconceptions about green trade liberalisation, while sparking discussion and debate within the research and political communities. Hopefully, it will contribute to a much-needed impetus to agree on an ambitious international agreement on sustainable energy trade, to the benefit of our climate, environment, economic growth and development, energy security and public health.
