Asia and the Pacific countries, including the Philippines, can make trade and investments more climate-smart as environmental goods continue to face high tariffs and non-tariff barriers (NTBs), according to the United Nations Economic and Social Commission for Asia and the Pacific (Unescap).
In a report, Unescap said environmental goods including technologies vital for climate action such as solar panels and wind turbines face higher tariffs and more trade barriers compared to carbon-intensive fossil fuels.
“Climate-smart trade and investment policies are defined as all government regulations aiming to reduce or limit net greenhouse gas emissions that can affect foreign trade and investment,” the report stated.
“Eliminating fossil fuel subsidies and establishing carbon pricing mechanisms are among the main policies that internalize the environmental costs of greenhouse gas emissions,” it added.
Climate-smart trade and investment policies include liberalizing trade in environmental goods and services and addressing cross-border trade inefficiencies.
Unescap also said there is a need to set emissions standards for imports, implement NTMs, and address other wasteful subsidies.
Based on the data, Unescap found that 16 out of 26 economies examined in the Asia-Pacific region, the average applied tariffs on carbon-intensive fossil fuels are lower than those on environmental goods.
Apart from a few notable exceptions, such as Japan, Kyrgyzstan, the Lao People’s Democratic Republic, the Philippines and Nepal, 21 economies examined are imposing more non-technical NTMs on the imports of environmental goods than on imports of carbon-intensive fossil fuels.
“Additional steps are also needed to combat trade in illegal timber, which contributes towards large-scale deforestation. Mandatory requirements of climate-friendly production processes may run contrary to the current non-discriminatory principles of the World Trade Organization (WTO) agreements, which are based on product features and not the features of the production processes. In such cases, voluntary eco-labelling could be used instead of imposing NTMs,” the report stated.
Unescap said most countries in Asia and the Pacific are insufficiently prepared to face extreme weather events and natural disasters, which are growing in intensity and frequency due in part to climate change.
Over the past 60 years, temperatures in Asia and the Pacific have increased faster than the global mean. Six of the top 10 countries most affected by disasters are in the region, where food systems are disrupted, economies damaged, and societies undermined.
The report stated that while the region suffers the worst consequences of climate change, it is also a key perpetrator by accounting for over half of the world’s greenhouse gas emissions. This share is increasing as populations grow and economies continue to be powered by fossil fuels.
“Measures to put the economies of Asia and the Pacific on a low-carbon pathway, and adapt and become more resilient to the impacts of climate change, must be front and center of the region’s post-pandemic recovery,” said Armida Salsiah Alisjahbana, United Nations Under-Secretary-General and Executive Secretary of Unescap, while acknowledging that governments in the region are joining the race to net zero under challenging circumstances from the current polycrisis.
Unescap noted that the sum of countries’ actions in nationally determined contributions to cut emissions and adapt to climate change falls short of the required ambition under the Paris Agreement.
There was a 16 percent increase in greenhouse gas emissions from 2010 levels is forecast, a world away from the 45 per cent reductions needed to keep warming within 1.5 degrees celsius.
Without decisive action, Unscap said global warming will remain a central driver of poverty and inequality in the region – with disastrous consequences across the continent and existential ones in Pacific small island developing States.
The study sets out the transformations needed in three key sectors – energy, low-carbon mobility and logistics, and international trade and investment.
It further provides concrete proposals on how these major shifts can be financed and how better to measure challenges and progress towards a net-zero carbon future in support of sustainable development.###