Trade&Climate

This project, carried out for the Trade Unit of the EU Parliament, provided quantitative assessments of economic and climate impacts of international trade and analysed current climate and trade policies.

Climate change remains at the top of the EU’s political agenda. At the EU summit in March 2007, leaders of the EU’s 27 Member States recommitted themselves to addressing the challenge of climate change by committing to unilateral cuts of 20% in CO2 emissions relative to 1990 levels. The EU leaders pledged to increase cuts to 30% if other developed and emerging nations also join an international climate agreement.

The rapid growth in international trade represents a key challenge for climate policy. Transport of traded goods is energy intensive and there is concern that production could move to countries not bound by greenhouse-gas restrictions. However, international trade also presents new opportunities for addressing climate change, e.g. through distribution of environmental technologies and green products.

This project for the Trade Unit of the EU Parliament addressed a range of issues related to the links between international trade and climate change.

SERI was responsible for the quantitative economic and environmental assessments. On the one hand, SERI estimated the range of changes in the production costs of selected products, if production was relocated from Europe to non-Annex B countries under the Kyoto protocol. On the other hand, SERI provided quantitative estimations of the CO2 emissions related to production and transport of four industrial and two agricultural products, when produced either in Europe or in a typical producer country in other world regions.

The final project report, which was presented to EU Members of Parliament by Andreas Kraemer, Director of Ecologic, in June 2007, contains three parts. The first part, prepared by SERI, illustrates the interrelations between international trade, transport and GHG emissions and compares the climate impacts of selected EU-produced goods with their imported counterparts. The second part by Ecologic examines ways in which market-based policy instruments could be employed within the context of trade policy. Finally, Chatham House elaborates the legal opportunities and obstacles to employing trade-related measures as a means of combating climate change.

Publications