Issue No.2



A. High-Level Meeting at the World Trade Organization WTO Tackles Environmental Issues

B. UNFCCC Secretariat Holds Technical Prep. Meeting for COP 5 in Germany this Autumn



Quote of the week: "It is important that an international agreement have both features--carrots as well as sticks", recommended Scott Barrett, associate professor of economics at the London Business School speaking at Resources for the Future (RFF), a think-tank in Washington DC in Dec.'97 (

Barrett discussed using trade sanctions to punish free-riders and side payments of some kind to encourage participation by developing countries. But, however important they might be for the climate regime, such "carrots and sticks" as these are subject to the rules of the prevailing trade regime GATT/WTO. Barrett's crucial hurdle for the success of the climate regime depends on how a multilateral environmental agreement (MEA) like the Kyoto Protocol would be treated under GATT/WTO.

In March 1999 a high-level WTO meeting convened in Geneva to consider new arrangements among international institutions; Newsstory A. At about the same time, but 8 hours to the North by train, in Bonn the climate body UNFCCC held a more mundane, technical meeting; Newsstory B.

A. High-Level Meeting at the World Trade Organization WTO Tackles Environmental Issues

In Geneva new possibilities came into view that the carbon regime might someday be reconciled with the trade regime, as WTO's Director-General Renato Ruggiero welcomed Klaus Toepfer, Executive Director of UNEP. Such a development could throw new light on the skepticism that has circulated recently, both near the British Scott Barrett and the American Resources for the Future RFF, as regards the chances for widespread ratification of the Kyoto Protocol. Renegotiation of the treaty would be one consequence, if many more like RFF begin to put their hope in trading models that are applied domestically, but prove hard to coordinate internationally. Canada has assembled a current overview of these initiatives at its recent international symposium

Ruggiero declared the WTO's intention to have established a "world environment organization [WEO] parallel to the WTO", or at least to upgrade significantly the environmental competence in the WTO. Toepfer avoided recognition of a WEO per se, but declared his qualified willingness to cooperate. The qualifications were that neither his commitment to the primacy of politics nor his openness to civil society concerns be compromised. A representative of German NGOs, Tobias Reichert for the Forum on Environment and Development, reported later in their _Rundbrief_ 1/1999, that NGOs could not condone the "implicit [assumption at the WTO] that free trade was given a higher priority than sustainable development." Instead, he demanded more transparency from the WTO, and used the apt image of a good traffic cop to characterize his ideal WTO: A good cop would see to it that no one get run over in traffic, in particular the weaker motorists, and would not let the drivers of the more-expensive cars make the rules, or would he make his own rulings independently of the traffic laws, much less outside the constitution.

"The WTO also held two High Level Symposia, one of which was on Trade and Environment. It was divided into three panels, one of which was tellingly moderated by Michael Zammit Cutajar, Executive Secretary, United Nations Framework Convention on Climate Change (UNFCCC). "The Federation of German Industries said the spreading of environmental management systems is a key issue, and advocated the use of the life cycle approach and life cycle assessment." ( Environmental management systems like the ISO 14000 series were also mentioned in Bonn; see next section. A representative of German NGOs, Klaus Liebig for the Forum on Environment and Development, expressed his suspicion in Rundbrief 1/1999 that by inviting the developing countries and the environmentalists to Geneva to talk about sustainable development, the WTO was merely attempting to "get both groups of [its loudest] critics in the same boat" as it is. Then it could proceed to push through a Millennium Round in late November in Seattle, WA. Interfaces between the carbon and trade regimes will also be dealt with at the RIIA conference listed below.

B. UNFCCC Secretariat Holds Technical Prep. Meeting for COP 5 in Germany this Autumn

The IISD's Environmental Negotiations Bulletin ENB reported from the scene that "the workshop was designed to advance the discussion on technological and methodological aspects of Article 6 (joint implementation), Article 12 (clean development mechanism) and Article 17 (emissions trading) so that the Conference of the Parties (COP) can take decisions on all three mechanisms at its sixth session," COP 5 which will be held from 25th October - 5th November 1999, also in Bonn (

"Core topics at the workshop included reference case/baseline methodologies, additionality, verification and reporting in relation to the clean development mechanism (CDM) and Article 6 projects. Further issues addressed were the validation and funding of projects under the CDM and the adaptation component, reporting, verification and accountability issues related to emissions trading. ... Kok Kee Chow, Chair of the Subsidiary Body for Scientific and Technological Advice (SBSTA), asked what would be done in cases in which there were no existing emissions. If a solar power plant is built in a town that did not previously have electricity, what is the justification for saying that a coal-fired power plant was avoided. Who determines whether coal was a starting point or even a serious option?"

ISO 14000 was discussed as one conceivable means of verification, but regarded as inadequate in itself. "Harris Gleckman, UN Department of Economic and Social Affairs, reviewed the history of ISO's work on standards for environmental management and [like Heister, World Bank, and Telenes, Der Norske Veritas] examined possible context it may provide for implementation of Protocol mechanisms. He noted that ISO has a Climate Technology Task Force and is eager to involve a wider constituency."

Axel Michaelowa of HWWA Institute for Economic Research, Germany ( spoke on baselines for the Clean Development Mechanism (CDM, Article 12). He also offered this newsletter the following exclusive highlights: The workshop succeeded in evoking a detail discussion without lapsing into negotiation strategies (with the exception of China and India, which brought up repeatedly the basic issue of fairly alloting emission rights and continued to view all the mechanisms very critically.) Definite progress on critical issues can be seen both in the Workshop and in the country submissions for the June meetings in Bonn. For example, the Umbrella Group set clear prerequisites for participation in JI/CDM/IET: fulfilment of duties under Art. 5 and 7, i.e. reliable inventories, etc. There were intensive debates over a Swiss proposal to only allow such emission rights to be traded that are derived from the difference between a predetermined unchangeable emission path, which corresponds to the budget, and the actual emissions. This would have to be quantified annually. Michaelowa regards this proposal as unsuitable as it would not solve the problem of overselling. Annie Petsonk, Environmental Defense Fund EDF, proposed to discount emission rights from countries that exceed their budget. According to ENB, Michael Grubb, Royal Institute of International Affairs (RIIA), London, stated that "the system of accountability could work if the COP/MOP only considers government actions and if governments individually determine how they will involve industry" (more on that in next issue). The next climate meeting (SBSTA) is scheduled for 31st May - 11th June 1999 in Bonn; COP5 hotel reservations via


In the United States on March 29th the Electronic Industries Alliance (EIA) is continuing to follow developments in climate policy at its Spring Conference. It invited the U.S.senator who is submitting a bill for early action, John Chafee, to speak on the bill's potential impact on industry along with Judith Bayer, United Technologies and Stephen Harper, Intel ( Previously it had issued a statement on Kyoto on the Website "Electronics Innovation for Climate Protection", Washington DC,


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