Guest Article #14

UNCTAD and the climate change challenge

Increasingly compelling scientific evidence and a better understanding of the economics of climate change have moved the issue to the forefront of the international agenda. As the impacts of climate change are already being felt globally, in particular by the most vulnerable countries, an integrated international approach to addressing these challenges is crucial.

The work of the UN Conference on Trade and Development (UNCTAD) on climate change dates back to 1997, when the organization became one of the early movers in developing and promoting a global market for greenhouse gas (GHG) emissions trading. Mandated today by its member States to “consider climate change in its ongoing work of assisting developing countries with trade- and investment-related issues in development strategies,” UNCTAD, through its Climate Change Programme, addresses the economic aspects of climate change and its implications for trade and sustainable development. For example, this year's Trade and Development Report, one of the organization's flagship publications, will include some analysis of the challenges of climate change mitigation.

One key factor in climate change is international maritime transport, which carries 80% of the volume of global trade. Not only does international shipping contribute to climate change – generating around 3% of global carbon dioxide emissions from fuel combustion – but maritime transportation itself is also likely to be directly and indirectly affected by various climate change factors, such as rising sea levels, extreme weather events and rising temperatures. The wide-ranging impacts of climate change and their potential implications for development highlight the importance of integrating climate considerations into development and transport planning and strategies. Experts at a recent UNCTAD meeting on Maritime transport and the climate change challenge stressed the urgent need for agreement in the ongoing negotiations on a regulatory regime for GHG emissions from international shipping. At the same time, they urged that greater attention be paid to climate change impacts and adaptation requirements for transportation systems – particularly for ports, which are key nodes in the supply chain and vital for global trade. GHG emissions from maritime transport could triple by 2050 if no action is taken.

UNCTAD's climate change work also helps developing countries enhance their trade competitiveness and seize investment opportunities arising from the introduction of climate change policies and measures. It focuses on the trade competitiveness aspects of climate change policies, trade and development gains, and investment promotion in developing countries under the Clean Development Mechanism (CDM). The CDM, one of the “flexibility mechanisms” under the Kyoto Protocol, has created a dynamic carbon market and promoted foreign investment in emissions reduction while addressing the issue of sustainable development. It is a win-win-win opportunity for developed countries in meeting their emissions reduction targets; for developing countries in achieving sustainable development gains, including technology transfer; and for the global community in reducing GHG emissions cost-effectively. But key challenges and barriers remain, including agreement on the level of commitment of the negotiating parties and the role for CDM in the post-2012 climate policy framework. These issues were discussed at an UNCTAD expert meeting (Geneva, Switzerland, 27-29 April 2009) – on Trade and investment opportunities and challenges under the CDM.

A third area of UNCTAD's work involves helping developing countries prepare development-friendly responses to climate change in moving towards a low-carbon economy. UNCTAD's BioFuels Initiative assists interested countries in assessing the biofuels option by providing sound economic and trade policy analysis, capacity-building activities and consensus-building tools. The Initiative works closely with the private sector to develop increased production, domestic use and eventual trade in biofuels. It also collaborates with other UN bodies to ensure that national biofuels strategies take social, environmental, sustainability, food security and climate mitigation considerations fully into account.

UNCTAD is part of the UN's new Green New Deal initiative to combine fiscal stimulus measures with job creation, poverty reduction and GHG emission reductions. In addition, it launched a carbon-neutral initiative in August 2007 to inventory the organization's carbon footprint and devise a carbon mitigation strategy.