Climate cost of free trade

By Devinder Sharma
26 Oct 2009

Climate change has become the buzzword in all development discourses. However, not many realise that the international agencies now trumpeting climate change issues, have long been pushing for free global trade, which is the major cause of global warming.


The countdown has begun. The forthcoming UN Climate Change conference (popularly called CoP-15) scheduled to be held at Copenhagen from December 7 to December 18, 2009 is generating tremendous excitement. Climate change has suddenly become the buzzword. As top political leaders are getting ready to descend on Copenhagen, there is surely a thrill in the air.

The global debate, dominated by a handful of international NGOs, has managed to very deftly shift the entire development discourse to climate change. The United Nations (not only UNEP, but all its other arms), the bilateral donor agencies like USAID/DFID, and the global think-tanks like the International Food Policy Research Institute (which are no better than the corporate rating agencies) have for quite sometime been active in putting climate change on the top of the global development agenda. And they have surely succeeded.

In the process, the real issues confronting the world have been very conveniently swept under the carpet. So much so that if you don't talk about climate change you appear to be out of fashion, feel outdated.

I am therefore not amused to see Indian NGOs, who otherwise swear in the name of poverty, hunger and food insecurity, suddenly riding the climate change bandwagon. Even dalit and adivasi issues are being linked to climate change. I wouldn't be surprised if someone tries to find a correlation between climate change and the gender dimension. This is not only true of India but almost all the civil society organisations in the developing world. In reality, they are looking forward to an opportunity to be there where the action is. I mean travelling to Copenhagen, so that they can tell their colleagues: "yes, I was there."

This reminds me of the euphoria that the world had witnessed before the Earth Summit held at Rio in Brazil in 1992. The Indian media I remember had gone into an over spin before the Rio Summit. Almost all who wrote front page stories on the threats facing the Earth, landed at Rio. Once the Summit was over, the journalist came back to their respective countries, and the Earth was forgotten. Environment soon became a downmarket subject for the media.

Nevertheless, the Copenhagen Summit is expected to be somehow different. It is not only about emission standards but if you have been following it carefully, it is all about marketing green technologies and investments. I am not therefore surprised when Heads of State talk about Green Technology Revolution on the lines of Green Revolution, not realising that Green Revolution is in a way responsible for acerbating the climate crisis. In other words, the entire debate has been hijacked by the corporates to suit their business interests.

The UN says the world needs an investment of US $ 200 billion to fight climate change, which is a euphemism for corporate investment, and like proverbial cats you will see the Heads of State fighting to get hold of a sizeable pie. It is expected that the developed countries might offer the developing countries something between US $ 90 billion to 140 billion per year to be used for clean technologies. Climate change therefore offers bright business opportunities.

Just a few days prior to the Copenhagen conference, the 7th Ministerial conference of WTO is being held at Geneva, from November 30 to December 2, 2009. The general theme of the WTO Ministerial will be The WTO, the Multilateral Trading System, and the Current Global Economic Environment. Surprisingly, the WTO Ministerial is talking in terms of the global economic environment and not climate change. You will ask me so what? Well, that is where I want to draw your attention to.

The two international treaties that have hogged the limelight for quite some time are the WTO and the Kyoto Protocol. While one relates to global trade, the other is about climate change. Global trade not only affects economics but also adversely impacts environment. After all, trade is not going to be conducted on bullock carts. It will mean more transportation, which means more burning of fossil fuels and therefore more global warming.

In other words, both the ongoing international negotiations work at a cross-purpose. And yet, no one is talking about the role trade will play in bringing the world to a tripping point. The reason (why it is not being done) is simple. Any effort to bring in trade in the climate change negotiations will hurt corporate interests. And since it hurts corporate/business interests, the media, the think-tanks, the international donors and of course the politicians will not bring it up.


The World Bank has, through its Global Economic Prospects report, already said that a successful Doha Round completion could generate US $ 291 billion in global economic gains. It of course did not tell us how much the world would have to suffer by way of rise in the average global temperature. So, in other words, the Doha Development Round of WTO paves a way for US $ 291 billion gain, essentially for business and trade, whereas a successful completion of the CoP-15 would mean an additional business opportunity of U $ 200 billion for the manufacturers of green technologies.

In the mid-1980s the OECD (Organisation for Economic Cooperation and Development) had published a study, which had estimated that by the end of 2004, when the WTO Uruguay Round was expected to complete, there would have been an increase of 70 per cent in internationally traded goods as compared to 1992. This of course would mean that more fossil fuels would be burnt to transport these goods across the continents. Already OECD estimates shows that 60 per cent of the world's use of oil goes for transportation, which are more than 95 per cent dependent on fossil fuels.

OECD estimates had also shown that 25 per cent of carbon emissions, with some 66 per cent of this coming from rich countries, is from the global transport sector. When the Doha round comes to a close, I am sure you will agree that the greenhouse gas emissions from transportation would only skyrocket. But we will never be told how much would that be, and what should the world do to usher in green trade.

We know that each tonne of fright moved by plane uses 49 times energy compared to used by a ship. And a 2-minute take-off by a Boeing 747 Jumbo is equal to 2.4 million lawn movers running for 20 minutes. In the US alone, there are 7,000 planes in the sky at any given time, and their number will increase in the days to come. More than the emissions standards, what is therefore more crucial for the changing climate is the restriction needed to be imposed on global trade. We need to have trade reduction mechanism on the lines of mandatory emission cuts.