Impact of Climate Change on Arab Countries - (IPCC) - Working ...

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CHAPTER 12
INTERRELATION BETWEEN CLIMATE CHANGE AND TRADE NEGOTIATIONS
I. INTRODUCTION
It is now generally accepted that climate change
is the result <strong>of</strong> increasing concentrations <strong>of</strong> carbon
dioxide, methane, nitrous oxide and other
greenhouse gases (GHGs) in the atmosphere
(IPCC, 2007). Arab countries collectively contribute
less than 5% <strong>of</strong> the total world emissions
<strong>of</strong> GHGs. i The Middle East and North Africa
(MENA) region is the world’s largest oil producing
region, and oil, along with other fossil fuels
gas and coal, is the largest GHG emitter.
According to the International Energy
Association (IEA), the world’s energy needs stand
to increase by over 45% above present needs by
2030, indicating an annual increase <strong>of</strong> approximately
6%. Carbon-intensive fossil fuels will
continue to dominate the energy sector with oil
remaining the primary energy source if business
as usual is the prevailing scenario (IEA, 2007).
In December 2009, environment ministers and
<strong>of</strong>ficials from 192 countries will meet in
Copenhagen to attempt to negotiate a new international
regime to battle the urgent threat <strong>of</strong> climate
change. The existing framework, the Kyoto
Protocol, has not yet succeeded in realizing the
reductions commitments made by its Parties, and
calls for incorporating climate change initiatives
into the international trade framework have
grown louder. While Kyoto has not been an
overall success, it does provide Parties with
enough flexibility to choose policy instruments
to meet their commitments. Most importantly,
Kyoto establishes positive measures to achieve its
goals, namely technology transfer through the
clean development mechanism (CDM), financial
and technical assistance through joint implementation
(JI), capacity building, and market based
incentives, such as emissions trading.
Given the limits <strong>of</strong> the international trade regime
which is not mandated to establish positive measures,
a balanced multilateral environmental
agreement (MEA) with its own tools and with its
own dispute settlement mechanism for enforcement,
taking guidance from the WTO framework,
may be the ideal forum in which to navigate
the climate change crisis. This chapter
asserts that it is not solely through punitive regulatory
mandates that climate change should be
addressed, but also and inevitably through a
combination <strong>of</strong> technology transfer and partnerships
between industrial, oil-producing and other
developing countries. Only a multilateral
approach to climate change, outside the WTO,
wielding both carrots and sticks, will allow these
issues to be properly addressed.
II. POST-KYOTO PROTOCOL
AND WTO RULES
The Kyoto Protocol has drawn on the United
Nations Framework Convention on <strong>Climate</strong>
<strong>Change</strong> (UNFCCC) and Rio Principle 7 ii to
build its foundations, clearly defining UNFCCC
Annex I countries as developed countries that
must carry the sole responsibility for climate
change mitigation during the first phase (2008-
2012) <strong>of</strong> implementation. As long as trade measures
in the Protocol do not breach the relevant
criteria <strong>of</strong> the WTO, fulfilling the necessity test,
effectiveness and least trade restrictive requirements
in addition to the proportionality aspect, iii
such measures will not be challenged by WTO
members. Furthermore, reviewing WTO
jurisprudence, such as the 1998 Shrimp-Turtle
case, iv the organization’s flexibility to accommodate
national environmental protection policies
becomes apparent, as well as the organization’s
refusal to sanction the imposition <strong>of</strong> unilaterally
conceived measures extra-territorially. In the
implementation <strong>of</strong> Kyoto, compatibility has been
achieved with the rules and disciplines <strong>of</strong> the
international trade regime, and a balance
between its disciplines and those set out in Kyoto
has been and should continue to be successfully
cultivated. Any post-Kyoto agreement should
aim for a similar design. It is important to
emphasize that such a balance will at no rate
inevitably compromise climate change mitigation
measures.
Although the relationship between Multilateral
Environmental Agreements (MEAs) and the
WTO as such has been relegated to the margins
<strong>of</strong> the negotiating agenda <strong>of</strong> the Doha development
round, proponents <strong>of</strong> negative measures to
combat climate change continue to press for the
creation <strong>of</strong> specific WTO rules to accommodate
the environment. For the Arab world, this push
becomes particularly dangerous when energy,
which has largely been a marginal issue in the
WTO, comes under scrutiny directly through
the occasional promotion by some <strong>of</strong> an interna-