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

ARAB ENVIRONMENT: CLIMATE CHANGE 147
decide which environmental services should be
targeted for liberalization at the national level in
a country’s schedule <strong>of</strong> commitments. viii This is
not the case for environmental goods where tariff
reductions would need to be applied to a common
set <strong>of</strong> environmental goods agreed to by all
WTO members. ix
Negotiation on the liberalization <strong>of</strong> environmental
goods in the Doha round faces enormous
challenges and to date its outcome remains undetermined,
be it within the overall package <strong>of</strong> the
Doha round or – if ventured by some – a standalone
or plurilateral agreement within the WTO.
No agreement has yet been reached on a boundary
for EGS.
The extent to which energy will be incorporated
into the trading system through the negotiation
<strong>of</strong> EGS – if these negotiations are to see the light
<strong>of</strong> day – depends upon how environmental
goods’ boundaries will be defined, and more precisely,
whether end-use criteria and PPMs should
be required to define environmental goods. x It is
the prospect <strong>of</strong> the inclusion <strong>of</strong> PPMs in the definition
<strong>of</strong> environmental goods coupled with the
emergence in the developed countries <strong>of</strong> environmental
policies, higher standards and regulations
in value added energy sectors (chemicals and fertilizers,
plastics, aluminium, and cement), and
increasing levels <strong>of</strong> investment in renewable energy
that is <strong>of</strong> particular interest to the Arab
world. xi
PPMs
PPMs, which refer to the way in which a product
is made, have long been a controversial feature <strong>of</strong>
the trade and environment debate. In spite <strong>of</strong>
GATT precedents that the ‘likeness’ xii <strong>of</strong> products
(a litmus test to protect against discrimination)
should not be determined on the basis <strong>of</strong>
the method <strong>of</strong> production or production processes,
xiii environmentalists have fought against this
view, noting that PPMs are fundamental to minimizing
the environmental impact <strong>of</strong> a product
during its life-cycle. xiv As it stands, trade rules
allow for distinctions between products solely on
the basis <strong>of</strong> the end uses and characteristics <strong>of</strong> the
products themselves. The introduction <strong>of</strong> PPMs
into the definition <strong>of</strong> environmental goods aimed
at climate change mitigation would then reverse
this, allowing like products whose end uses and
characteristics are the same to be treated differently.
This would pose a significant challenge to
the Arab world, whose production is dominated
by carbon-intensive activity. Moreover, the
introduction <strong>of</strong> PPMs here will certainly open
the backdoor for member states to challenge
‘likeness’ elsewhere, essentially erecting trade barriers
on the basis <strong>of</strong> loosely related production
factors.
For the Arab economies, in addition to being
reliant on carbon-intensive activities and traditional
energy production, almost all are net
importers <strong>of</strong> ‘clean technologies’ and their associated
goods. In principle, trade measures are an
important channel for the diffusion <strong>of</strong> climate
mitigation goods. In reality, however, adapting
solely trade measures aimed at carbon reduction
will have significant adverse impacts upon traditional
energy producers and fossil fuel exports,
given the absence <strong>of</strong> positive measures designed
to stimulate diversification, development, growth
and transition toward low-carbon production