RIO+20 Issues Briefs
Produced by the UNCSD Secretariat and UNCTAD
March 2011 No. 1
Trade and Green Economy
The potential trade risks of a transition to a green economy — protectionism, conditionality, subsidies — are issues of long standing and not unique to the green economy. The urgency of the global challenges which a green economy transformation is intended to address, and the scale of the actions being taken by many countries to build green economies, does however bring renewed focus to these risks. At the same time, the new greening of markets associated with a green economy may provide opportunities for many developing countries to find global markets for goods and services with low
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There is evidence, however, that trade policy and environmental policy can act as complements in the development of conditions within which firms can innovate and 3 become more internationally competitive. Germany and Japan have amongst the toughest environmental regimes in the world, yet both are among the most able to compete internationally. Their strategies are clear: innovate now and capture markets in the future. It should be stressed, however, that technological capacity is key to such success. Table 1 shows three broad categories of policy measures: regulatory measures, fiscal measures and trade capacity development measures which may affect trade. The 'traffic lights' in the right-hand column provide simple signals by assessing GATT-WTO rules and disciplines. Green light illustrates that policy measures are generally free from trade concerns. Yellow light requires moving slowly with caution and underlines the need to revisit the rules to seek further clarity. Red light means "stop" or “no-go-zone” under current WTO rules. The following subsections discuss each of these green transformation measures, their trade-related concerns and proposed responses.
2. Policy options for green transformation and trade implications
As a growing number of countries adopt strategies and policies to promote a transition to a green economy, this will have implications for trade flows and trading opportunities.