Transcript National Measures, Trade and Competitiveness

National Measures, Trade and
Competitiveness
Post Bali: A Dialogue on Trade, Climate Change and
Development
Dialogue organized by UNEP
February 11, 2008 Geneva
Aaron Cosbey, IISD
Climate change
law, policy
Legal linkages
Trade and
investment
law, policy
Economic activity
Climate change
Physical impacts
Trade and
Investment
Scale, composition,
technique, direct
effects
National Measures
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Subsidies
Tax measures
Green government procurement
Carbon taxes; cap & trade schemes
Standards (e.g., efficiency standards)
Product bans
R&D spending, technology cooperation
Energy policy measures
Available at:
www.iisd.org/pdf/2007/
climate_trade_competitive.pdf
Defining the Problem
• Competitiveness is meaningless
when it is used at the level of the
nation state. At that level we should
just talk about productivity.
• We will use it at the level of firms or
sectors
Two types of concerns
1. The non-Party problem: competitiveness
issues arise because non-Parties don’t
impose standards on their firms, sectors
2. The implementation problem:
competitiveness issues arise when
Parties favour firms or sectors in
implementing their commitments
The non-Party Problem
• Paucity of research in this area
• Look at the rich body of pollution haven
literature:
– Does stringent regulation reduce market share?
– Does stringent regulation affect investment
decisions? (greenfield investment or migration)
• Early studies found little impact, and pollution
related costs at 2 – 3% of total costs.
• Poor methodologies though, e.g.:
– Cross-sectional rather than panel data analysis
– Aggregated analysis rather than sectoral
analysis
Final answer?
• There are competitiveness impacts, on
market share and on investment decisions.
• In most cases these are quite moderate.
• In specific sectors, they can be considerable.
• Need a sectoral analysis.
Which Sectoral Characteristics
Matter?
• Energy intensity
• The ability to pass along cost increases to
consumers
• Opportunities for abatement (technology)
Policy implications
• At firm level: boost ability of firms to
innovate – standard competitiveness
policy
• Sectoral level: need for sectoral research
to identify vulnerable sectors, design
policy accordingly
Policy implications,
national level
• Reduce burden to be shouldered, e.g.
through energy efficiency, conservation,
renewables policies
• Regulatory design to include flexibility
(e.g., market mechanisms)
• Trade measures
Policy implications,
international level
• International agreement on targets for all
• International agreement on common
approaches (carbon tax, for example)
Aaron Cosbey
International Institute for
Sustainable Development
[email protected]