NGOs warn trade ministers not to undermine climate talks

International NGOs such as development agency Oxfam welcomed a long overdue meeting of trade ministers in the sidelines of the UN Conference on Climate Change in Bali over the weekend to discuss how trade policies can contribute to, and not undermine, action on climate change. The meeting has been convened by the Indonesian government. Trade ministers from 30 countries, including the US, EU, Brazil, India and China, will discuss cross-cutting trade-related climate issues such as the liberalisation of "climate-friendly" technologies, and "mutual supportiveness" between the WTO and the UNFCCC regimes. However, the meeting has been seriously compromised by a proposal from the US and EU that uses the climate crisis to push for their trade liberalisation schemes heavily criticised at the World Trade Organisation (WTO). This is a double whammy for poor countries. Not only are poor people bearing the brunt of climate change caused by industrialised nations, but rich countries are now also seeking to boost their exports by opening up developing countries' markets.

The US and EU have billed their proposal to eliminate tariff and non tariff barriers on a range of goods and services that can have environmental uses as bold and new, but according to Oxfam, it is neither. "The UN conference on climate change is being used as a pretext to dust off old proposals that haven't gotten anywhere at the WTO," said Barry Coates, Executive Director of Oxfam New Zealand in Bali. "A high priority for action on climate change is support of developing countries to access affordable and clean technology and to develop technology that is most appropriate to the challenges they face. But rich countries have done little to honour their commitments." The proposal would open up developing country markets to goods that are mainly produced in rich countries. The list contains products and services, such as medical, surgical or laboratory equipment and sanitation services, with uses that extend beyond environmental benefit and certainly beyond reducing greenhouse gas emissions. Also, green technologies developed in rich countries can be too expensive and are not always the most appropriate for developing countries.

Friends of the Earth International President Meena Raman said: "This informal trade ministerial taking place behind closed doors on the sidelines of climate talks is deeply worrying. What the climate negotiations need is trust and transparency. The World Trade Organisation's anti-poor, anti-environment agenda must be kept out of the UN climate process." The proposal of the United States and the European Union tands to benefit business interests especially in rich countries rather than people affected by climate change in the developing world, according to FOE International. Meena Raman added: "Technology transfer is not about reducing trade barriers. If the EU and US were serious about helping developing countries tackle climate change, they should be radically reducing their own emissions and living to up their obligations by paying their climate debts. This includes the costs of adaptation and mitigation, including technology transfer and forest conservation. Instead, we see them pushing intellectual property rights onto the poor that block the transfer of desperately needed environmental technology."

The WWF urges the need to explore how the global financial and trade systems can contribute to combating climate change. Global financial and trade systems are important but only means to sustainable development and serve those larger objectives of common global concerns. Those include to overcome effectively the current climate crisis which if not effectively addressed will put the world and especially its most vulnerable communities into jeopardy. Communities and countries who should ideally benefit from global trade and finance transactions. The WWF recognizes that this was the original idea behind the initiative by the Indonesian Government to organize dialogues between selected ministers of trade and finance on climate change issues. The WWF is, however, concerned that governments are not ready to have such a free exchange of ideas, rather it seems that certain governments will try to misuse the climate talks to further their usual agenda on e.g. trade issues as reflected in some of the Doha and other disputes.

In order to achieve the goal of addressing climate change trade and finance ministers should clearly frame the discussion in terms of finding ways and means to address climate change through financial and trade mechanisms in a way that promotes sustainable development and equity. The WWF proposes the following issues:

1. As an outstanding and urgent issue for the current negotiations, technology and finance for Mitigation and Adaptation are key Building Blocks for a post-2012 global climate framework. Without speedily scaling up the efforts to provide substantially new and additional resources to developing countries, support for a truly global low carbon trajectory and meeting the needs of the poor will fail. Therefore, industrialized countries’ Trade and Finance ministers need to provide adequate and predictable mechanisms required in the context of a Bali Mandate and beyond. Equity, fairness, monetary capacity and current as well as historic responsibility for greenhouse gas emissions requires this as a fundamental non-negotiable precondition for global trust and confidence building among all nations, a prerequisite for success for the next two years of climate negotiations which need an encouraging sign by the rich countries’ F & T ministers at the Bali talks.
2. Trade policies can be used to increase the market share of energy efficient and low carbon technologies such as renewable energies. Policies should then be implemented in such a way that it reflects global priorities rather than narrow national (or regional) interests. The EU decision to limit the import of low cost energy saving light bulbs from China on the basis of “anti-dumping” is an example of how policy should not be implemented.
3. Proposals should be developed in cooperation between proponents from Annex 1 and non-Annex 1 countries in order to increase the potential to reflect common interests. The proposal by the U.S. and EC for Liberalizing Trade in Environmental Goods and Services in the WTO Negotiations enforces polarization between Annex1 and non-Annex1 countries where transcendence is needed.
4. Public subsidies of fossil fuels contribute to a lock-in into a carbon-intensive energy system. It is therefore necessary to start a process to shift public investments away from fossil fuels towards low carbon, highly-efficient and sustainable technologies. This should occur while ensuring that the cost is not shifted onto the poor who are often dependent on fossil fuel energy for daily needs.
5. Public financial institutions should reflect the interests of broad society. Internationals Financial Institutions and Export Credit Agencies should therefore phase out investments in fossil fuels and increase investments in energy saving, renewable energy and sustainable low carbon technologies.
6. The democratic control of public finance managed by International Financial Institutions and Export Credit Agencies should be strengthened. This should happen through an increased role for national parliaments and increased public participation and transparency (good governance).
7. Public procurement can make an important contribution to stimulating green technologies to move out of the start-up phase. Governments should move to 100% green procurement.