Trade as climate enforcer

While nobody expects the climate talks in Copenhagen to produce a new global treaty, President Obama has embraced the principle of binding limits on greenhouse gases and an eventual pact remains likely. What the president has not done, however, is allay concerns that U.S. emission cuts could be a one-way street as other nations, especially in the developing world, flout the deal.

Worries about enforcement are not unfounded. Numerous countries already ignore global environmental treaties. For example, 175 nations are party to the vital Convention on International Trade in Endangered Species, yet nearly a third of the member nations fail to uphold its terms. The same goes for other pacts. Most notably, compliance with the 1997 Kyoto Protocol has been highly uneven, with many countries falling far short of their targets for cutting greenhouse gases.  

{mosads}If the Obama administration and congressional leaders want public backing for a climate treaty, along with Senate ratification, they need to start thinking harder about how to enforce the deal. Realistically, there is only one way to achieve this goal: Use trade rules to penalize countries that violate a new climate treaty.

Congress is considering a measure, as part of a domestic climate change bill, to levy a border tax on products from countries that fail to cut their carbon emissions. That measure should be enacted to prevent carbon “leakage” as energy-intensive industries move to countries with lax emissions standards. But important step would be to include environmental criteria in trade preference programs, particularly the Generalized System of Preferences, which cut tariffs for developing nations that meet various eligibility criteria.

In 2008, developing countries imported just over $30 billion worth of products into the United States duty-free under GSP. This amounted to over $850 million in savings for countries like Brazil, India, and Indonesia. Nations in Africa, South America, and the Caribbean also realized millions in savings thanks to regional trade preference programs.

The criteria for trade benefits have evolved over the years to include new conditions that reflect U.S. economic and foreign policy priorities, such as respect for labor standards and intellectual property rights. But the environment has been conspicuously absent from these criteria.

Now is the time to correct that omission. Specifically, the GSP should be amended to stipulate that beneficiary countries enforce all global environmental treaties they are party to, as well as uphold their domestic environmental laws.

Congress has a chance to act immediately to make this change because the current version of the GSP is set to expire at the end of this month. By voting to include environmental criteria in the GSP, Congress can send a message — both to the U.S. public and to the world — that the United States is serious about enforcing a climate treaty.

Forging a new linkage between trade and the environment need not mean that poor countries lose their access to U.S. markets. A period of transition would be needed as the new rules take effect. After that, steps would be taken to address violations over time, with the United States providing financial and technical assistance to help countries live up to their environmental obligations — not just to a climate treaty but to other pacts designed to protect the planet.

Developing countries have their own reasons to go green, of course, and new trade rules can help empower environmentalists in those countries.

{mosads}Studies show that poorer regions will be hurt most by climate change, and many people in these places are already suffering from unchecked air pollution, contaminated drinking water, and deforestation. Meanwhile, the development benefits of such steps as investing in renewable energy or preserving biodiversity are becoming ever more evident.

Too often, environmentalists in places like Asia and South America find themselves impotent in the face of powerful interests who argue that nothing should stand in the way of economic growth. New U.S. trade rules would help change that balance of power and foster more sustainable patterns of development.

Living up to a new climate change treaty won’t be easy for anyone, least of all the United States. But if the U.S. finally does its part, it is fair to demand that trading partners who get special benefits also do theirs.   
 
Callahan is director of the International Program at Demos, a New York think tank. Vasile is a policy analyst at Demos.