The climate talks held in Bali at the end of last year brought a major breakthrough in terms of a "gradual wakening up" to the trade aspects of climate change as well as many other areas, writes Cristian Egenhofer for the Centre for European Policy Studies (CEPS).
Trade ministers convening for the first time in the framework of the 'Informal Trade Ministers Dialogue on Climate Change' concluded that international trade, development and climate change are "mutually supportive", with international trade playing an "important role" in addressing climate change issues in terms of future sustainable development, states the December 2007 paper.
One important aspect already under discussion in the EU and the US is offsetting potential international competitiveness disadvantages by taking coordinated border measures to protect domestic industries from "unfair competition", the CEPS commentary highlights.
The EU emissions trading scheme (EU ETS), which foresees such protective borders, may serve as a test case for how serious the EU aims to link climate change to trade aspects, the authors say.
In Bali, the trade ministers also agreed upon several procedural recommendations, such as examining the possibility of holding joint sessions with finance and development ministers and strengthening and enhancing engagement between the WTO and the UN Framework Convention on Climate Change (UNFCCC), the commentary says.
The author further applauds the Bali participants for bringing the US back to the table and for creating an "Ad Hoc Working Group on Long-term Cooperative Action under the Convention", which he claims has already identified the key element of a successful post-2012 agreement, namely a long-term target that takes into account national differences and focuses on mitigation, adaptation, technology and financing.
Egenhofer foresees very difficult negotiations between developed and developing countries regarding their respective commitments as both sides are trying to shift responsibility onto the other.
Whereas the 'Third World' refers to the "historical responsibilities" of developed nations after having "burdened" the world with greenhouse gases in the early stages of their industrial development, developed nations argue that emissions cannot be kept stable without at least some commitment from developing countries, the CEPS paper outlines.
Egenhofer concludes that although "both sides have a point", an agreement must be found to set the fight against climate change on the right path.