Proposals by rich nations that poor countries should remove their trade barriers on environmental goods to combat global warming on Sunday raised a storm at the United Nations’ climate change talks in Bali.
The US and the European Union found a rare common cause when they combined to ask developing nations to cut or remove tariffs on imports of environmental goods and services.
Poor countries pointed out, however, that the US and EU retained import tariffs on biofuels.
The dispute rocked the first meeting at which the world’s trade ministers have discussed climate change. It was intended to persuade governments that climate change should be regarded as an economic as well as an environmental issue.
Celso Amorim, Brazil’s minister of external relations, said after the meeting: “There was no agreement on the US and EU proposal ... It will not do much for climate change.”
Other developing countries were also understood to be concerned that the proposal would only benefit rich nations, by opening up export markets in green goods and services before poor countries had a chance to develop them.
Susan Schwab, US trade representative, said that biofuels were classed as an agricultural issue at world trade talks and thus were separate from discussions of environmental goods and services. The US and EU have filed with the World Trade Organisation a list of 43 “climate friendly” environmental products, including wind turbine and solar panel components, that they say should be free from import barriers.
Ms Schwab said import tariffs on such goods varied from 3 per cent to 20 per cent.
She said the US was a net importer, with $15bn (€10bn, £7.5bn) of exports a year in environmental goods and services, compared with $18bn of imports, and added that the biggest suppliers of the latter were China and Mexico.
Pascal Lamy, director-general of the WTO, said large sums were at stake: “The economics ... tell us that the global market for environmental goods and services is estimated to be worth $550bn a year.”
Carmakers in plea for partnership with policymakers
By Andrew Bounds in Lisbon and John Reed in London
The bosses of Europe’s biggest car and truckmakers are calling for a global deal on climate change as the European Union finalises pollution-cutting legislation that will have a profound impact on their businesses.
The board of the European Automobile Manufacturers’ Association (ACEA) makes the call to leaders at the climate change conference in a letter to the FT on Monday.
“We shall be all the more successful if we can develop a partnership with policymakers based on a common vision of what our industry can achieve, how this could be enhanced by other policies and in what timeframe,” the group says.
Carmakers have complained that draft emissions-cutting legislation in Europe puts too much of the burden on them to change their vehicles, while taking too little account of other factors such as consumer choice.