Fostering climate action through trade-related policy instruments : delivery strategies and support tools : final report

Carbon-intensive and low-carbon goods and services alike are traded across borders in massive numbers daily. Changes in international trade rules have the potential to significantly alter the balance of these flows in one way or the other, while policy measures to reduce greenhouse gas emissions can act as catalysts for increased trade in one area and to decrease or even eliminate trade in another. The extent to which the two are aligned, therefore, has a great influence on the success of each. While much attention has been paid to the potential conflicts and challenges between the two regimes, there is increasing political interest in finding ways in which they can support each other's objectives and work in complement. This goal of this study project, 'Fostering climate action through trade-related policy instruments', was to identify concrete opportunities to make this happen. Specifically, it sought to identify ways in which the European Union (EU) can use trade-related instruments - at a unilateral, bilateral or multilateral level - to further the achievement of long-term mitigation and adaptation goals. It focused on ambitious and innovative strategies to align EU trade and climate objectives that were at the same time realistic and achievable. Casting the net widely, it considered opportunities across a broad range of sectors and looked not only at classic trade instruments such as treaties and tariff adjustments, but also at less obviously trade-related measures that nonetheless have important trade impacts, including in the area of international cooperation. This report represents the final report of the study project. It presents the final measures that have been selected based on a three stage consultative process led by the advisory team - consisting of experts from Climate Focus, WTI Advisers, Atlas Environmental Law and Ecofys - in close coordination with the EU Commission and other stakeholders from international organizations, civil society and the private sector (Figure 1). From an initial scoping of 31 measures across six different sectors and areas, four measures have been recommended for action. For each of four selected measures the report presents technical tools - principally legal and policy text suitable for use in EU trade instruments - and policy tools, comprising political argumentation and strategy. We further developed an assessment of feasibility and economic, political and legal implications for two additional measures that were not considered feasible in the current political climate but nonetheless worthy of additional analysis.