Political economy of trade and the environment : why are trade policy makers getting increasingly involved with climate change?

Abstract

Climate change-trade interlinkages are emerging as a cause of increasing conflict among different countries. Implementing environmental policies is costly; therefore, restrictive trade measures are being used by Kyoto Protocol compliant parties (Annex 1 countries), as a mean to retaliate against non-compliant parties whose industries are accused to gain unfair competitive advantages in the international markets. However, forcing poor countries (the non-Annex 1 parties) to adhere to expensive environmental standards may also be unjust, as this may negatively affect their development efforts. As trade policy makers are obliged to increase their involvement with climate change issues, negotiations a the Doha round are getting more complex; the result is slow process in the advancement of both the trade and environmental agendas. Nevertheless, trade and environmental policy makers need to increase interaction as both share a commitment, and common responsibilities towards the sustainable development objective.