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The Trade & Environment Review 2009/2010

Acknowledgements: FANRPAN acknowledges United Nations Conference on Trade and Development (UNCTAD) as the source of this document

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UNCTAD´s Trade and Environment Review 2009/2010 focuses on promoting poles of clean growth to foster the transition to a more sustainable economy in developing countries that enhance resilience to the inter-related economic, food and climate crises.

While several rapidly industrializing developing countries have not seen a major slump in their growth by the recent economic and financial crises, TER 09/10 focuses on the 140 plus low-income and least developed countries, which have not caused the economic, financial, climate and food crises, but have to bear the full brunt of these crises.

How can they effectively mitigate these inter-related crises while transiting to a qualitatively and structurally different growth and development model?

The TER 09/10 singles out three areas of sustainable, "green" growth that are of particular and strategic importance for the low-income and least developed countries:
  • Enhancing energy efficiency, often implemented in combination with material and resource efficiency.
  • Mainstreaming sustainable agriculture, including organic agriculture.
  • Harnessing the use of off-grid renewable energy technologies for sustainable rural development.
The TER 09/10 contains some 20 essays from a wide range of experts on these subjects, including two forewords from the Minister of Water and Environmental Affairs of South Africa and the Minister of Trade and Associate Minister for Climate Change Issues of New Zealand.

Preface, Dr. Supachai Panitchpakdi, Secretary-General, UNCTAD iii
Hon. Buyelwa Sonjica, South African Minister of Water and Environmental Affairs v
Hon. Tim Groser, Minister of Trade and Associate Minister for Climate Change Issues (International Negotiations), New Zealand vii
Acknowledgements xiv
Acronyms xv
Chapter 1. Opportunities from Low Carbon Growth
I. De-toxifying finance and de-carbonizing the economy: opportunities for clean and sustainable growth in developing countries 3
Ulrich Hoffmann, UNCTAD secretariat
A. Introduction 3
B. Root causes of the current systemic crisis and the importance of sustainable growth 4
C. Poles of clean growth for new, sustainable production and consumption patterns 9
D. Decarbonizing the economy: a new industrial revolution 10
E. Creating low-carbon and other poles of clean growth in developing countries 13
F. Why has the “greening” of economies not yet happened? 21
II. Sustainability and global economic recovery 23
Mark Halle, Executive Director, International Institute for Sustainable Development Europe (IISD-Europe)
III. Carbon markets are not enough 26
Frank Ackerman, Stockholm Environment Institute and Tufts University
A. The state of the debate 26
B. What would carbon prices accomplish? 27
C. Where do new technologies come from? 28
D. Carbon markets and developing countries 29
E. Conclusion 30
IV. Making the transfer of clean-energy technology effective: from concept to action 31
Aaron Cosbey, Associate and Senior Advisor, Trade and Investment, International Institute for Sustainable Development (IISD)
Notes 34
References 39
Chapter 2. Growth Pole: Energy Efficiency
I. Energy efficiency: turning challenges into opportunities for developing countries 47
Rene Vossenaar, former staff member of the UNCTAD secretariat
A. Introduction 47
B. Benefits deriving from improvements in energy efficiency 48
C. Selected EE policies and measures 53
D. Energy efficiency in end-use sectors 56
E. The trade dimension 60
F. Institutional issues 63
G. Conclusions and recommendations 65
II. Energy efficiency in Brazil 68
Jayme Buarque de Hollanda and Pietro Erber, Brazilian Institute for Energy Efficiency
A. Energy efficiency in Brazil 68
B. Barriers to energy efficiency 71
C. Conclusion 76
Notes 77
References 81
Chapter 3. Growth Pole: Sustainable Agriculture
I. The effectiveness, efficiency and equity of market based and voluntary measures to mitigate greenhouse gas emissions from the agri-food sector 87
Alexander Kasterine, Senior Adviser (Trade, Climate Change and Environment), International Trade Centre (UNCTAD/WTO) and David Vanzetti, Visiting Fellow, Crawford School of Economics and Government, The Australian National University, Canberra, Australia
A. Introduction 87
B. Impact of the agri-food sector on climate change 88
C. Emissions trading schemes and carbon taxes 91
D. Border tax adjustments 96
E. Payment for environmental services 97
F. Carbon labelling 101
G. Food miles 105
H. Summary and discussion 108
II. Organic agriculture – A productive means of low-carbon and high biodiversity food production 112
Urs Niggli, Director, Research Institute of Organic Agriculture, Switzerland
A. Introduction 112
B. Characteristics of organic food and farming systems 112
C. Multifunctional characteristics of organic farming 113
D. Organic farms are well adapted to climate change 116
E. Can organic farming feed the world? 116
F. Conclusions 117
III. Developing low-carbon agricultural projects within global carbon markets: opportunities and challenges 119
Emergent Ventures, India Pvt. Ltd.
A. Challenges and future policies 120
B. Synergy with other mitigation options 121
IV. Sustainable agriculture : considerations about methane emissions 124
Allan Rae, Professor, Department of Economics and Finance, Massey University, New Zealand
A. Introduction 124
B. Livestock farming and methane emissions 125
C. Approaches to mitigation of livestock methane emissions 126
D. Conclusions and policy challenges 127
V. Impacts of climate policy on air and maritime transport in developing countries 129
Marc D. Davidson, Senior consultant, CE Delft, the Netherlands and Jasper Faber, Coordinator aviation and maritime, CE Delft, the Netherlands
A. The context 129
B. The options 130
C. The potential impacts 130
D. Options to mitigate economic impacts on developing countries 132
E. Conclusions 133
Notes 134
References 136
Chapter 4. Growth Pole: Renewable Energy Technologies
I. Harnessing the potential of renewables: the case of energy access in rural areas 145
Darlan F. Martí, UNCTAD secretariat
A. Introduction 145
B. Energy poverty and the “missing Millennium Development Goal” 146
C. Rural electrification 147
D. Scaling up renewables: feasibility and prospects 152
E. Tapping regulatory and financial opportunities 156
F. Conclusion 163
II. Combining climate change mitigation actions with rural poverty reduction: DESI Power’s Employment and Power Partnership Programme 165
Hari N.Sharan, President, Decentralized Energy Systems India Ltd.
A. Background 165
B. The EmPower partnership programme 167
C. Conclusion 172
III. Powering the green leap forward: China’s wind energy sector 173
Dong Wu, UNCTAD secretariat
A. Public policy 174
B. Enterprise strategies 175
C. Technology clusters 176
D. Conclusion 177
IV. Liberalizing climate-friendly goods and technologies in the WTO: product coverage, modalities, challenges and the way forward 178
ZhongXiang Zhang, Senior Fellow, East-West Centre, Honolulu, Hawaii
A. Introduction 178
B. What products to liberalize and how? 179
C. The way forward 181
V. WTO negotiations on environmental goods and services: the case of renewables 184
Alexey Vikhlyaev, UNCTAD secretariat
A. Introduction 184
B. Should renewables be fast-tracked? 185
C. Listing of environmental goods: what could be a logical outcome? 186
D. How to negotiate non-tariff concessions? 188
E. Living agreement instead of a living list? 190
F. Conclusions: Market access or market creation? 192
VI. The WTO negotiations on environmental goods and services: need for a change in mindset away from a free-standing sectoral deal 194
Barbara Fliess, Senior Analyst, Trade and Agriculture Directorate, OECD
VII. Environmental goods: a reality check 197
Veena Jha, IDRC Research Fellow and Visiting professorial fellow, Warwick University
A. Environmental goods do not reach all potential users 197
B. Restricting the scope of EGs 198
C. How important are tariffs? 198
D. What happens with rising GDP? 198
E. FDI growth correlates with trade in environmental goods 198
F. The importance of technical assistance 199
G. Developing-country negotiating strategies 199
H. Environmental services 199
Notes 200
References 204

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