WEC Rules of Trade and Investment: Catalysing the low-carbon economy

Global trade in environmental goods is estimated to be around US$1 trillion annually, and growing quickly. As countries struggle to deliver energy systems that are secure, affordable and environmentally sensitive, eliminating tariff barriers to environmental goods proves to be an essential tool to achieving all three goals.

In this timely paper, the World Energy Council, within its Rules of Trade & investment programme, continues its work in promoting more international cooperation in the energy sector. Building on previous work, the Council proposes an extensive list of goods for inclusion under an Environmental Goods Agreement to support the WTO negotiations. The goods the Council recommends for inclusion are of greatest importance to balancing what the organisation refers to as the ‘energy trilemma’, a policy framework grounded in three critical elements that involve energy that is (1) secure; (2) affordable; and (3) environmentally sensitive.

 

A short retrospective
The Asia Pacific Economic Partnership (APEC) acted first to create a trade programme designed to facilitate environmentally-friendly projects. At its leaders meeting in 2012, APEC nations committed to reduce and cap their tariffs on 54 environmentally-friendly products at 5%.  This action by APEC members is a tangible international endorsement of the principle that trade liberalisation can contribute simultaneously to economic growth and to environmental sustainability.

At the beginning of 2014, 14 World Trade Organization (WTO) members came together in Davos and announced their commitment to explore opportunities in the WTO to build on the APEC’s ground breaking commitment to reduce tariffs by the end of 2015. Together these countries alone account for 86% of global environmental goods trade. With this publication, the World Energy Council endorses these efforts to negotiate an Environmental Goods Agreement under the WTO.