Global trade and promotion of cleantech industry: a post-Paris agenda

Abstract

The Paris Agreement adopted in December 2015 puts the world on a new footing for global solutions to the issue of mitigation of climate change. In the formulation of climate policy, the issues of trade in cleantech goods, and the promotion of cleantech industries through industrial policy measures such as local content requirements, now loom large. The case for reconciliation between the United Nations Framework Convention on Climate Change (UNFCCC) and World Trade Organization (WTO) is now becoming stronger, and calls for specific steps to enable trade to accommodate green industry promotion strategies. Specifically, it is proposed that the next Conference of the Parties under the UNFCCC, to be staged in Morocco late in 2016, adopt a resolution calling on the WTO to recognize the authority of the UNFCCC in recognizing climate change mitigation as a ‘public good’, whose pursuit might allow for temporary use of industrial development policies such as local content requirements, if countries wished to follow such a strategy.Policy relevanceCountries’ trade policies are currently formulated without reference to climate change, while climate change strategies are formulated without reference to principles of fair trade. The article proposes means through which the two regimes, governing trade and climate change, and the two principal bodies involved, the WTO and UNFCCC, can be brought to a state of mutual recognition and (prospective) harmony. The implications for climate policy are traced.