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World Bank discusses Trade and Climate Change

The World Bank, along with two other NGOs, held a panel discussion today on the trade implications of the ongoing climate negotiations.  The final presentation, on Technology Transfer and Climate Change was the most substantive, as detailed below.  The presentations did not address either labeling schemes, standards, border carbon adjustments, or subsidies.  For an in depth discussion of these topics, please see the 2009 CIEL publication, Is World Trade Law a Barrier to Saving our Climate?, available at: http://www.ciel.org/Publications/ClimateTradeReport_foee-ciel_sep09.pdf

began by discussing possible implications
of Copenhagen outcomes for the world trading system, and coping policies
minimize conflicts in the trading system.  In order to prevent what he
called a "train wreck" in the making, he encouraged Industrialized
Countries and Emerging Economies like Brazil, India, China and Russia,
to agree upon climate change rules for trade outside of the WTO
system.  He especially emphasized not letting the WTO's Dispute
Settlement Body take up the issue of climate related trade measures.

der Mensbrugghe, Lead Economist at the World Bank, followed with an
outline of some of the probable changes in patterns of international
trade that rising global temperatures might precipitate.  His primary
emphasis was on the implications of climate change on agriculture.  A
representative of the World Health Organization (WHO) questioned why the health
related aspects, i.e. the human rights implications of climate change,
were not being addressed by the presentation, which was not answered by
Mr. van der Mensbrugghe.

Aaron Cosbey of the
International Institute for Sustainable Development discussed technology transfer and development assistance.  In using the IPCC 4 definition of Technology Transfer, he argued that weakening IPRs to stimulate the transfer of climate technologies is insufficient for the dissemination of these technologies to developing countries
.   Rather, Mr. Cosbey emphasized the need for developing countries to have  enabling environments in place for investment.  He suggested learning from the experience of the trade regime, vis-a-vis Aid for Trade, to improve the investment climate in these countries, rather than looking at the experience of the WTO in handling another global challenge – access to medicines – with the Doha Declaration on Public Health.  He cited three reasons for the relative insignificance of IPRs in the dissemination of climate technologies: (1) the requirement for trade-secret protected know-how to implement patented technologies; (2) the significant barrier of a poor investment climate in many developing countries; and (3) the inapplicability of public health and IP lessons to energy-related technologies. 

However, in response to a question posed by CIEL, Mr. Cosbey did acknowledge that his analysis did not account for either patents on the most cutting edge of alternative energy technologies (i.e. cleanest), or the expected emergence of Carbon Capture and Sequestration (CCS) for "Clean[er] Coal."  These advancements will be covered by patents for several years to come, and likely will not have the same level competition enjoyed by current climate technologies.  The World Bank, in its 2010 Development Report, projects that about 25% of the necessary reduction of greenhouse gasses (GHGs) by 2050 will come from CCS technology, which is expected to be an exceptionally concentrated industry. 

Indeed, his hypothesis on the impact of IPRs assumes a sufficiently competitive environment, where alternative suppliers of solar panels, wind turbines, etc, are readily available.  This is the case with older technologies that are in the public domain.  However, in order to reduce greenhouse emissions to 350 PPM, the World Bank, IPCC, and other researchers are united in stating the necessity that more efficient technologies be developed, deployed and disseminated to developing countries.  Thus, it is entirely possible that as advancements in energy generation/GHG reduction are developed (in large part with public funding) the importance of patents held by the private sector will increase tremendously.  

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