Ecological Labelling and the World Trade Organization

Ökologische Kennzeichen gehören zu den marktorientierten Instrumenten der Umweltpolitik und finden international zunehmend Anwendung. Sie enthalten Kriterien über die Herstellungsweise von Produkten, welche bei einer Anwendung auf ausländische Produkte zu Konflikten mit Exportländern führen können. Der Beitrag zeigt auf, worin die Probleme von freiwilligen Kennzeichnungsprogrammen im internationalen Handel liegen. Im Mittelpunkt steht der Vorschlag der Europäischen Kommission, die derzeitige Stellung der ökologischen Kennzeichen gegenüber dem Regelwerk der WTO in einer neuen WTO-Verhandlungsrunde zu klären. Es wird aufgezeigt, wie die in Kennzeichnungsprogrammen gesetzten Standards über Produktionsprozesse zu WTO-Regeln im Verhältnis stehen. Um künftig Konflikte aufgrund von ökologischen Kennzeichen zu vermeiden, sollten die Kennzeichnungsorganisationen bei der Festlegung von Kriterien miteinander international kooperieren und darüber hinaus sollte ein Austausch zwischen der WTO und diesen Organisationen erfolgen. Ecological labels are a market-oriented environmental policy instrument which is applied in a rising number of countries. Products have to meet several criteria in order to qualify for a label. Criteria on production processes of goods can potentially conflict with international trade rules. This article focuses on the current relationship between ecological labels and the WTO legal system. The European Union suggested that this relationship should be more clearly identified and thus be negotiated during a new round of WTO trade talks. We discuss the EU approach and argue that standards on processes and production methods used in eco-labelling schemes are not part of the current WTO legal regime. There is no need, however, to amend the WTO text to comprise eco-labels. Rather, there should be more international co-ordination of standards used in eco-labelling programmes and more cooperation between labelling initiatives and WTO institutions.Ecological Labelling, World Trade Organization, International Environmental Policy, International Trade

Ecological Labelling in North-South Trade

We investigate in a horizontal product differentiation model with North-South trade the implications of a home bias in consumers' demand for labelled goods. We compare mutual recognition and international harmonisation of ecological labels with respect to firms' profits and welfare. Northern consumers perceive a warm glow from buying green, but have information problems with imported labelled products. Firms differ in labelling costs which could help a Southern firm to compensate for the home bias under mutual recognition. Under harmonisation the home bias disappears. Welfare analysis of harmonised labelling shows that a Southern firm gains from adopting a harmonised label - even if there is "eco-imperialism". Given the specific trade structure in our model, harmonisation is a beneficial regime except for the case that labelling costs reach a specific treshold.Ecological Labels, Product Differentiation, North-South Trade, WTO Rules

International climate diplomacy after the Trump election victory: Germany and the EU should intensify their outreach to climate allies

The election of Donald Trump as the new US president heralds difficult times for international climate policy. The US together with the EU was the key driver of the Paris Agreement in 2015. The new president will end climate policy cooperation with China, and with other emerging and developing countries. Moreover, he has announced plans to reverse the climate-policy legislation which is needed to implement the US climate targets. This will undermine the trust many countries have increasingly put in the US as a credible climate policy partner who is serious about tackling global warming. German and EU negotiators know this challenging situation from the years after the Bush administration’s withdrawal from the Kyoto Protocol in 2000. In light of the enormous push for international climate policy cooperation over the past three years, Germany and the EU need a comprehensive new climate diplomacy strategy to deal with the fallout of the US turnaround. First of all, they need to prevent a chain reaction at the international level by pushing, together with their key partners, for the Paris Agreement to be implemented. Second, they will have to pay more attention to how they interact with the new US representatives joining the negotiations as well as with the new US administration. And third, they should limit the damage to climate diplomacy and action by cooperating even more closely with US states and non-state actors. (author's abstract

Climate and security revisited: Germany's priorities for the 2019/2020 UN Security Council period

Germany will hold a non-permanent seat on the UN Security Council in 2019 and 2020, and has announced that climate fragility will be one of its priorities. However, the Council members’ interest in climate change and willingness to debate improving preparation for its security implications are very mixed. In continuing the follow-up to the Swedish-led debate of July 2018, Germany will face three challenges. First, adding value for all parties involved, the vulnerable developing countries as well as the permanent five countries in the Security Council. Second, matching ambitions with resources; in particular, Germany’s credibility as a climate policy leader needs to be maintained and engagement needs to be pushed at the highest level possible. Third, managing expectations on possible Security Council progress on this non-traditional security issue in the next two years. Diplomatic efforts should improve information flows for countries suffering from climate change impacts, intensify connections across forums inside and outside the UN, and lay out what can actually be achieved through the Security Council. (author's abstract

Addressing the risks of climate change: what role for the UN Security Council?

The Small Island Development States (SIDS) and other developing coun­tries affected by climate change are demanding more attention be given to climate-related losses and damages. The issue of "loss and damage" is being addressed in UNFCCC negotiations; however, the SIDS regard the Security Council as another key place for related debates. The Security Council can sound out climate policy interests to increase knowledge and improve the means of early warning. Moreover, its role can be to focus on the security aspects of climate risks and highlight im­portant preventive approaches. These include, above all, development policy and the implementation of the Sustainable Development Goals (the UN 2030 Agenda). The demands on the Security Council are strongly linked to the inter­national climate negotiations. Thus, Germany’s commitment to climate policy has to be broad and long-term in times of dwindling multilateralism. Due to the Corona pandemic, short-term national and international policy agendas have readjusted to address the crisis situation, which has been detrimental to the climate policy agenda. A debate at the Security Council should nevertheless keep the focus on climate-related risks as such. (author's abstract

Klimaverhandlungen in Marrakesch: für die Umsetzung des Paris-Abkommens ist kontinuierliche Unterstützung aus Deutschland nötig

Direkt nach Inkrafttreten des Paris-Abkommens (PA) am 4. November treffen sich vom 7. bis 18. November die Vertragsstaaten der Klimarahmenkonvention zu ihrer nächsten Konferenz in Marrakesch (COP22). Zum Auftakt wird Gastgeber Marokko die rasante Ratifikation des neuen Klimaabkommens feiern. Aber die Konferenz muss vor allem dazu dienen, das noch vage Konstrukt des neuen Abkommens zu konkretisieren, die Anliegen der Entwicklungsländer voranzubringen und weitere Mittel für die globale Klimafinanzierung zu mobilisieren. Deutschland kommt bei all diesen Vorhaben die Rolle des Unterstützers, Vorbilds und Antreibers zu. Im Rahmen der G20-Präsidentschaft, die Deutschland am 1. Dezember von China übernimmt, wird die Bundesregierung bei den großen Verhandlungsmächten weiterhin für eine ambitionierte Klimapolitik werben müssen, damit dem Paris-Abkommen zügig Taten folgen. (Autorenreferat

The Paris Agreement 2015: turning point for the international climate regime

At the Paris climate summit in December 2015 the 196 parties to the United Nations Framework Convention on Climate Change (UNFCCC) established a new international climate policy regime from 2020 onwards. The Paris Agreement includes how to proceed with protecting the climate (mitigation), how to adapt to climate change (adaptation), and how to handle potential loss and damage, technology transfer and climate finance. The Nationally Determined Contributions (NDCs) are recognised internationally as each country's way forward in mitigation and adaptation actions. Amongst the UNFCCC parties a key differentiation remains: developed countries are asked to act ambitiously and fast on mitigation, and to support developing countries financially and technically to deliver on their NDCs. For the first time, the participation in international climate policy is comprehensive, and accounting rules and transparency requirements for emissions data will apply to all countries in the same manner after 2020. Regular reviews will take place every five years in order to motivate an increase in ambitions towards the global temperature limit of 2 degrees Celsius and the financial commitments. The research paper elaborates how negotiations and the international energy and climate policy settings evolved since the Copenhagen climate summit and how the 21st Conference of the Parties (COP21) in Paris was prepared. It examines the national climate policy and climate diplomacy activities of the United States, China, India and the European Union as well as the building blocks of the new regime. The Paris Agreement sets a framework for an effective regime. Germany and the European Union will have to follow up in 2016 with own measures and with shaping further details of the regime. (author's abstract

Corrective Ad Valorem and Unit Taxes: A Welfare Comparison

The ad valorem versus unit taxes debate has traditionally emphasized tax yield. For this criterion, ad valorem taxes outperform unit taxes in terms of welfare for a wide range of imperfect competition settings, including Dixit-Stiglitz monopolistic competition. Yet, in a number of policy fields, such as environmental, health or trade economics, policy makers apply taxes to target the production/consumption volume in an industry, i.e. aim at a certain corrective effect rather than tax yield. This paper compares the two tax instruments with respect to equal corrective-effect in a Dixit-Stiglitz setting with love of variety, entry, exit, and redistribution of tax revenues. We find that unit taxes lead to more firms in the industry, less output per firm, less tax revenue, but higher welfare compared to ad valorem taxes.Externalities; Monopolistic competition; Taxes; Specific taxes; Welfare

How to Turn an Industry Green: Taxes versus Subsidies

Environmental policies frequently target the ratio of dirty to green output within the same industry. To achieve such targets the green sector may be subsidised or the dirty sector be taxed. This paper shows that in a monopolistic competition setting the two policy instruments have different welfare effects. For a strong green policy (a severe reduction of the dirty sector) a tax is the dominant instrument. For moderate policy targets, a subsidy will be superior (inferior) if the initial situation features a large (small) share of dirty output. These findings have implications for policies such as the Californian Zero Emission Bill or the EU Action Plan for Renewable Energy Sources.Environmental policy; Monopolistic competition; Taxes; Subsidies; Welfare; Zero Emission Bill

China's approach to international climate policy: change begins at home

Chinese government officials have repeatedly declared that China – now the world’s biggest greenhouse gas emitter – wants to take on more responsibility for climate policy at the international level. Chinese emissions targets were announced in July at the Petersberg Climate Dialogue, but were then withdrawn. China, along with the United States, will play a decisive role in preparations for the Climate Summit of the United Nations Framework Convention on Climate Change (UNFCCC) in Paris in 2015, during which a new agreement is to be launched. At home, China faces the challenge of reducing the tremendous harm done to its population by smog and environmental damage. Ad hoc measures may achieve quick successes, but without major structural changes the emissions trend will not change. This is challenging for Beijing, as can be seen in its wavering over international commitments. China’s international involvement depends on: momentum from the U.S.; balancing the interests of developing countries; and the readiness of the EU to press forward on important issues bilaterally rather than internationally. (author's abstract