Tackling non-tariff measures key to addressing energy trilemma

Christoph-Frei-Ban-Ki-Moon-feb

With environmental goods representing a trade market of approximately US$ 1 trillion annually, reducing barriers to trade and investment would support cost effectiveness and efficient decarbonization of the energy sector leading to more sustainable and accessible energy systems.

The above finding was released in a new report by the World Energy Council.

While a number of international efforts have been progressing in the elimination of tariff barriers, a comprehensive initiative to phase out non-tariff barriers on products covered in the current multi-national environmental goods tariff negotiations could be undertaken.

These topics are only just starting to be addressed within the World Trade Organisation (WTO) rules and appear to be limited, states the report launched at the APEC Market Access Group meeting in Lima, Peru, on 18 August.

The World Energy Perspective 2016: ‘Non-tariff measures: next steps for catalyzing the low-carbon economy’, published by the Council’s Rules of Trade Knowledge Network, includes experts from 28 countries. It explores how an open global trade and investment regime focusing on energy and environmental goods and services, can foster the transition to a low carbon economy.

As a trade barrier, non-tariff measures (NTMs), frequently relate to customs procedures and import requirements, technical standards and other regulations that impede the flow of goods and services. NTMs affect between 80 percent and 90 percent of trade. Therefore, understanding and tackling NTMs that impact on the low-carbon energy sector should be a priority in a country’s efforts to successfully address its energy trilemma.

Christoph Frei, Secretary-General of the World Energy Council, said: “Addressing the energy trilemma presents extraordinary challenges for policymakers and requires an adequate global trade and investment regime. This would encourage and leverage investment, innovation and technology uptake, to meet the climate and energy objectives set by the United Nations, G20 and COP 21.”

In order to support policymakers in moving forward with a NTM related agenda the council has outlined some key recommendations:

* NTMs related to environmental goods should be addressed to enable the energy sector to transition towards decarburization in cost-effective and efficient manner

* Subsidies for energy technologies should be well designed or they could result in inefficient and unsustainable use of subsidized energy
* Where existing rules apply these should be enforced as needed
* Where rules do not exist WTO members should consider developing them

Rather than introducing new measures, governments could find solutions in adjusting existing measures to spur competition guarantee transparency and correct failures in the trade system such as resolving inefficiencies and discriminatory or duplicative measures, the report said.

Photo courtesy: https://www.worldenergy.org

Rajani Baburajan

editor@greentechlead.com