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Green Economy Side Event

“The trade dimension in the follow-up to the Rio+20 Summit”

20 June 2012 - 08:30 to 10:30
Riocentro Exhibition and Convention Center

Strong trade content in Rio+20 outcome document welcomed by speakers at UNCTAD panel

Immediately prior to the opening of the UN Conference on Sustainable Development, UNCTAD co-organized with the UN Department of Economic and Social Affairs (UNDESA), a panel discussion on the trade dimension in the follow-up to the Rio+20 summit at the RioCentro Exhibition and Convention Center in the morning of 20 June.

Secretary-General of the Rio+20 Conference, UN Under-Secretary-General for Economic and Social Affairs Mr. Sha Zukang, made an important call for action on the first day of the Conference. “Yesterday we agreed on a document, but the Rio+20 Conference is about implementation. Conference documents may be beautiful, but we are not here in a beauty contest," he said.

Mr. Sha told the panel that “Trade in itself is not intrinsically good or bad, it is rather the distribution of gains and losses, this is what matters for development. We know the challenges and constraints we face with the green economy transition, but let me emphasize that we have an opportunity in front of us for a development-led transition to materialize. Without it, we will have wasted opportunities. This is what brings us together here."

The views of UNCTAD Secretary-General Supachai Panitchpakdi complemented those of Mr. Sha's. "We may criticize all we want outcome documents, but we must adopt the positive approach and see what challenges lie ahead of us. We could have left Rio with nothing and we do have something," he said.

Specifically on trade, Dr. Supachai said he was pleased that attention has been given to trade in the outcome document, but emphasized that “It is important to make use of these words put down on paper. Hopefully we are able to provide here a better understanding on how trade could become a powerful means to enable countries to get on the bandwagon towards a more inclusive development-led green economy.”

Secretary-General of the 1992 Rio Conference, Mr. Maurice Strong, explained how the political situation at the moment was not conducive to a stronger outcome document. “I hope that one of the concrete results of this Conference is to revitalize the commitments that have already been made at Rio 1992 such as the environmental conventions and Agenda 21, " he said.

Mr. Strong reminded participants that commitment for a independent World Auditing Organization is needed and important “to ensure people are not only well informed but also that they have the means of holding their Governments accountable on the commitments emanating from the Conference.”

Environment Minister Manuel Pulgar-Vidal of Peru referring to how trade can support a green economy said: “ This question is very difficult to answer. We all have different ways of defining a green economy. It is very important to remember that the trade system has not been developed to support the GE. So why are we expecting that it will automatically support the green economy?”

Dr. Brendan Vickers of the Department of Trade and Industry of South Africa said that from his country’s perspective, there are many opportunities offered by the green economy: “First, it will allow us to reduce our GHG emissions; second, it enables us to develop local manufacturing capacity in green and energy efficient industries, particularly wind and solar; and third, it permits us to use the trade opportunities to address key developmental challenges such as high unemployment. It has been estimated that with the green economy we would be able to up to create 460,000 jobs, in the agriculture, fisheries and services sector.”

Mr. Vickers suggested 4 areas where UNCTAD could have a critical role:
1. In examining the policy space that exists and the policy space required for the green economy: “In South Africa we need to know what policy flexibility is needed to take advantage of the structural transformation. We are developing our solar and wind sectors, we have had to grasp with the impact of tariffs, protection, what incentives can we provide to the industry, what are the impact of standards, technology transfer and the role IPRs and development finance.”
2. In moving from the theoretical to the practical: “UNCTAD’s product space methodology is very useful but that in itself is not enough, we have to move beyond theory to understand where the space exists to support our local industries so we can have a meaningful market access.”
3. In assisting regional integration in the continent: “How do we use regional integration in Africa to support green jobs? “
4. In discussing trade and the green economy outside the existing legal framework: “UNCTAD’s proposal for a Forum on Trade and the Green Economy is an initiative we very strongly support as we can be targets for disputes in the future. We need a discussion removed from the contractual binding. The Forum can facilitate dialogue on many important issues, such as technology transfer and licensing.”

Mr. Aaron Cosbey of the International Institute for Sustainable Development (IISD) alluded to the measures that can be taken in support of the green economy and their trade effects: ”Only a few of these measures are trade-related, they include border carbon adjustments, low-carbon fuels standards, carbon foot-printing label for products, green government procurement, subsidies to promote sustainable development including feed in tariffs, domestic context requirements, land grants and free allocation of permits. All of these instruments are in widespread use. What we do not have is an international agreement on whether these instruments are appropriate or not.”

Mr. Cosbey said that we are not clear ex ante how these measures impact trade and some are illegal under GATT law: “We have a situation now where everyone is practising something and we are not talking about it. So we have a choice here to make, we can either decide to take up these issues at the WTO or decide to speak about it. I am not a big fan of letting the law decide.”

He said WTO is mired in controversy and completely unable to deal with new issues. So in his opinion, “UNCTAD’s promises a space where we can discuss issues such as what is the best practice, or least best practice on border carbon regimes. Is domestic content requirement an effective strategy? What I am proposing here is not a replacement for dispute settlement mechanism but rather how can we keep these tensions, these conflicts, away from becoming a real problem at the WTO.

The emergence of greener economies has been the consequence of several drivers including, increasing regulatory and policy changes put in place to deal with negative externalities, difficulties faced in responding to ever increasing demands over natural and energy inputs, changes in consumption patterns, corporate responses to environmental and social considerations, as well as competitiveness, efficiency and image variables.

In discussions leading the Rio+20 Conference, considerable political and negotiating efforts focused on the concerns that the green economy raises in trade contexts.  For examples, the emergence of green protectionist temptations and recent trade-related conflicts is one of the factors that has fueled such concerns.

Opportunities are also seen in the trade in environmental goods and services, higher investment levels and in the emergence of greener sectors in both developed and developing countries, such as organic agriculture, biodiversity based production, ecotourism and clean energy generation.

It is time to start shifting the emphasis from negotiations to concrete proposals on innovative cooperation frameworks and capacity building initiatives. UNCTAD is currently offering two specific technical cooperation initiatives to contribute to the Rio+ 20 follow up. The first, will address concerns about green protectionism by calling for a new “institutional” space, away from current trade negotiations and disputes, so evidence-based dialogue and solution sharing can be fostered: the Global Trade and Green Economy Forum. The second will assist developing countries in seizing trade opportunities that will arise from the emerging global green economy by helping them to identify promising green export opportunities.

This side event aims to showcase UNCTAD´s analytical work regarding the trade and development dimensions of the green economy, as well as its technical assistance and consensus building mechanisms to ensure a robust follow-up to the Rio+20 outcomes.  It will also discuss the establishment of a Global Forum on Green Economy and Trade and the value of the Product Space Methodology to map out a country´s comparative advantage vis-à-vis dynamic green goods and services.  The event will also provide a platform to facilitate expressions of interest and technical assistance calls and requests by donors and beneficiary countries, respectively, in relation to potential green products and services. 

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