Trade-Related Measures Based on Processes and Production Methods in the Context of Climate-Change Mitigation
AbstractThis paper provides an overview of existing measures relating to non-product-related processes and production methods (PPMs) adopted in the context of climate-change-mitigation policies, especially those linked to the life-cycle greenhouse-gas (GHG) emissions of particular products. Such domestic PPM-related requirements and schemes are important policy tools for promoting sustainable development and are aimed at addressing GHG emissions resulting from the activities involved in producing, processing and transporting the product to the final consumer. Their ostensive purpose is to promote better environmental outcomes and to ensure that domestic climate-change policies and incentives do not inadvertently undermine other environmental objectives. Even though the general objectives of the reviewed regulations and private schemes are comparable (e.g. the promotion of renewable-energy sources, or provision of information on the carbon footprint of goods), the approaches, level of detail, choices of instruments and targeted environmental characteristics vary considerably from country to country and from scheme to scheme. Some regulations rely more or less extensively on market mechanisms, attaching price premiums to certain types of products. Others introduce command-and-control provisions limiting the use of certain PPMs, variously defined in different countries. Still others target certain types of fuels eligible for public support, with varying eligibility criteria. Private schemes mainly use environmental sustainability claims to secure consumer preference. The choice of different instruments presumably entails different trade impacts. However, all of the reviewed measures and schemes are fairly new, and experience with their application and therefore their potential trade effects has so far been relatively limited.
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Bibliographic InfoPaper provided by OECD Publishing in its series OECD Trade and Environment Working Papers with number 2011/4.
Date of creation: 03 Aug 2011
Date of revision:
trade and environment; processes and production methods; trade policy; environmental provisions;
Find related papers by JEL classification:
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
- F18 - International Economics - - Trade - - - Trade and Environment
- N50 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries - - - General, International, or Comparative
- Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
This paper has been announced in the following NEP Reports:
- NEP-AGR-2011-08-29 (Agricultural Economics)
- NEP-ALL-2011-08-29 (All new papers)
- NEP-ENE-2011-08-29 (Energy Economics)
- NEP-ENV-2011-08-29 (Environmental Economics)
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- Baddeley, Shane & Cheng, Peter & Wolfe, Robert, 2011. "Trade Policy Implications of Carbon Labels on Food," Commissioned Papers 122740, Canadian Agricultural Trade Policy Research Network.
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