SADC event on climate change and trade

Posted by swallenoeffer on October 27, 2011

On 25th October 2011, a presentation on the linkages between climate change and trade in the SADC region took place at SADC Secretariat, followed by a discussion with technical staff from various directorates. The event was part of a series organised by TIFI, the Directorate of Trade, Industry, Finance and Investment, at the SADC Secretariat and aimed to provide an overview of issues related to climate change and trade.

The TIFI Series “Towards a Green SADC – an introduction to the impacts of climate change on regional economic cooperation” was held on 25th October 2011 from 11.30pm to 13.00pm at SADC House. Mr David Lesolle, Climate Change Expert, was giving a presentation on climate change and trade issues, followed by a question-and-answer session with the participants.

After a brief introduction to the science of climate change and an overview over the history of international negotiations under the UN Framework Convention on Climate Change (UNFCCC), Mr Lesolle introduced the linkages between climate change and trade and economic development. He pointed out that the SADC region is particularly vulnerable to climate change and climate variability due to its dependence on rainfall for agricultural production. The impacts of climate change on tradable commodities are mainly from increased temperatures, which can cause droughts and result in crop failures, subsequently leading to financial losses and problems in food security.

While adapting to climate change will be crucial for SADC in order to ensure industries can survive and production is maintained, climate change mitigation is another crucial issue with regards to trade. For SADC to respond to climate change mitigation, TIFI could consider issues such as reducing barriers to trade, trade liberalization to directly affect environmental standards and “environmental tariffs”. Technology transfer will be crucial for developing countries to achieve sustainable economic development and create a low-carbon economy. The idea is to address climate change mitigation through so-called “technology wedges”, targeting one sector after another in order to lower CO2 emissions, rather than addressing everything at the same time.

In terms of trade policies, SADC could look at streamlining investment rules in order to avoid “technology dumping” of carbon-intensive industries to developing countries, and harmonisation of standards which would positively affect the assimilation of clean technologies in the region. With regards to regional trade agreements, it was suggested that these offer opportunities to promote clean technologies and low-carbon development. The role of South Africa, who is by far the biggest emitter in the SADC region, however, must also be taken into account. Mr Lesolle presented the idea of a “SADC Bubble”, meaning that SADC Member States could combine their emissions when reporting to the UNFCCC, etc. and create a regional cap for emissions from SADC countries. This would leave room for intra-regional emissions trading, capacity building, investment and technology transfer.

In the following discussion, the issue of SADC’s position for COP17 was elaborated. Mr Lesolle explained that currently the main focus is on how to finance climate change. For Africa, capacity building and technology transfer also remains a priority. Climate change adaptation has moved up on the agenda over the last couple of years. On the question of how to balance the need for economic development with the need to cap emissions, it became clear that the wedge approach could provide a promising avenue for action in developing countries. Mr Lesolle also pointed out that a green statement of intent for developing countries would open doors for donors and investors. His recommendation to SADC was to decide on which sectors to focus on and set standards for the production of goods that aim at limiting the amount of CO2 in products. The role of TIFI could be to propose some guidelines that are aimed at assisting technology transfer and encourage green development. On the issue of funding availability under the Green Climate Fund, Mr Lesolle emphasised that the Green Climate Fund will be under a special UN committee in which Africa will also be represented, and it will be designed according to the principles of predictability, transparency, and accessibility. However, in order to absorb the funds, Africa will also need to build capacity to manage and administer projects.

In the concluding remarks, participants were invited to further discuss the proposals from the presentation and engage actively in the climate change negotiations from a trade perspective.

To download this report, click here.

The presentation is available here.