Leveraging Trade Agreements to Promote the Implementation of Most Common NDCs
Under the Paris Agreement
Clinic: Graduate Institute, Fall 2021
Beneficiary: Trade and Environment Division of the WTO
Read the full report here.
This report identifies synergies between trade agreements and Nationally Determined Contributions (NDCs) to the Paris Agreement. More specifically, it analyzes how provisions in existing trade agreements can be leveraged to help countries achieve the goals they have submitted under the Paris Agreement.
Specifically, this report provides deeper analysis of the most common categories of NDCs themselves. Building on the synthesis report of the UNFCCC Secretariat and the 2016 Trade Lab report, UNFCCC National Determined Contributions: Climate Change and Trade, this report identifies five critical categories of NDC goals: energy, building, waste, transport and land use, land-use change and forestry (LULUCF). For each of these areas, this report identifies a trade-related measure that could be adopted towards achieving the NDC. The measures examined in this analysis are: reducing or removing applied tariffs on wind turbine component parts for the energy category; VAT reduction on Energy Saving Insulated Windows (ESIW) for the buildings category; government procurement of plastic pollution capture devices for the waste category; transfer of electric highway technologies for the transport category; and soybean due diligence and certification schemes for what concerns the LULUCF category. Relevant supportive mechanisms are identified, but their detailed analysis is beyond the scope of this work.
For each measure, this report examines WTO compatibility that identifies any potential conflicts. For the measures examined, this report finds that while the WTO rules delineate the policy space countries have to adopt various measures to implement their NDCs, countries generally have the opportunity to do so in a WTO-consistent manner. Nevertheless, there are a number of different areas in which the link between NDCs and the WTO covered agreements can be strengthened. Accordingly, this report identifies various areas where improvements can be made, with a focus on (i) the implementation of Article 66.2 of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS); (ii) the ratification of the plurilateral Agreement on Government Procurement (GPA); and (iii) the transformation of the NDCs into a law at the domestic level. It then addresses the possibility of a climate change waiver of WTO obligations. While some of these measures are currently controversial, they may prove necessary in order to combat climate change.