Interaction between trade and climate change regimes has received much attention lately. While I can think of a number of “climate-positive” reasons for exploring synergies between the two regimes and for aligning policies that could stimulate production, trade, and investment in cleaner technology options, much of focus instead has been on using trade measures as weapons in the global climate negotiations. This stems mainly from competitiveness concerns in countries that are now racing to reduce GHG emissions to meet Kyoto 2012 targets and beyond and in the US primarily to allay domestic fears of a tightening climate regime. These concerns have led to proposals for tariff or border tax adjustments to offset any adverse impact of capping CO2 emissions. This also has roots in the fear of leakage of carbon-intensive industries such as steel and chemicals to non-implementing countries.
As we talk to people around the world on some of the key findings and views that we're building into the next World Development Report, we encounter some heated debates. One of these much-argued points is our view that the world must aim to keep mean global warming below 2oC, but as one of our advisors says, "be prepared for 4oC".
Here are the reactions. Some (mostly, but not just, in Europe) find it shocking that we can even consider a world with warming above 2oC or with concentrations of CO2 at or above 550 ppm. Others worry that we are setting 2oC as a target, which is very sensitive in the context of the upcoming negotiations. We are not. We are simply agreeing in the light of mounting evidence that the world should try very hard to stay below 2oC, since losses will likely begin to rise rapidly above that temperature and irreversibe impacts may occur - particularly in developing countries. A new version of the "burning ember chart" makes this painfully obvious.