Transcript Trade and Climate Change

Trade and Climate Change
DFAIT seminar, Ottawa
September 14, 2009
Aaron Cosbey
Bali to Copenhagen
A two-year programme of research and
consensus-seeking on trade and climate change
Context: three types of linkage
• Climate change’s physical impacts on trade
infrastructure, flows (infrastructure, changes in
comparative advantage)
• Climate change policies with trade impacts
(competitiveness and leakage impacts)
• Trade laws and policies that can obstruct or
support climate change actions (EGS, subsidy law)
Key areas of linkage
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Competitiveness and leakage policies
Subsidy law and domestic policies
Subsidy reform for climate change
Standards
IPRs and tech transfer
Low-carbon goods liberalization
A focus on competitiveness issues
• Issue 1: impacts on Canadians of measures taken
by others to address competitiveness and leakage
• Issue 2: competitiveness impacts for Canada
arising from the interplay of domestic and
foreign climate regimes
Issue 1: Impacts of foreign C&L measures
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State of play in the US and EU
Will Canada be targeted?
Are these measures WTO/NAFTA-legal?
Are they effective?
What sectors might be hit?
What are our options?
Issue 2: Regime differentials
• Will Canada need to employ C&L policies?
– What sectors are vulnerable?
– What policies are available?
– Why even discuss this at this point?
Issue 2: Regime differentials
• US regime on offsets
– Will Canadian regime link to international?
Continental?
– US regime will find significant low-cost offsets
internationally.
– Canada may be put at a competitive disadvantage
Issue 2: Regime differentials
• Pressure for a harmonized regime with US?
– Problem: Canadian economic structure is quite
different
– Impacts may be severe in some sectors if a
harmonized regime is adopted
– But then how to achieve ambitious targets?
Concluding thoughts
• SWOT analysis re the US: where do we stand?
• Need to engage the US on elaboration of its
regime: standards, methodologies
• What Canadian measures to address
competitiveness and leakage?
• Work on broader positive potential – EGS, clean
energy exports
Aaron Cosbey
[email protected]
www.iisd.org/trade/crosscutting