Americas Quarterly

Negotiating a Green Commitment Ricardo Lagos

TRADE VERSION OF
TARIFF STANDARDS BASED ON

carbon gas emissions.

Establish agreements in specific sectors that set acceptable levels of emissions per product type. Some voluntary agreements along this line have already been developed. To stretch them, we have to develop comparable categories for sectors regarding productivity and technology.

Institute national programs and policies that seek to implement the plans already agreed to within the international community. Countries that have adopted international goals to reduce emissions within their national plans could voluntarily take on commitments with the international community.

Reduce emissions by slowing deforestation. This is a key issue for our region. In Latin America, deforestation contributes 49 percent to the region’s total emissions. Latin American countries can and should move forward with a plan to provide financing to reduce deforestation, and, with it, other countries could explore increasing reforestation.

Whether there is success or failure in Copenhagen, the countries of the developed world have already developed significant commitments to reduce emissions. Whether the EU standards of the Three 20s or the pending laws within the U. S. are adopted, these norms should provide a further workable concrete framework for “clean production.” In this case, all the factors of carbon emissions, including sector-by-sec-tor measures, should be at the negotiation table. Such negotiations could include establishing carbon standards for products that enter the global market.

Success requires a fundamental change in the approach to global trade. All nations, particularly those in the developing world, will need to realize that

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reducing emissions is central to their ability to compete in the world economy. Countries that fail to take appropriate climate change measures will face higher costs in marketing their exports. At worst, they risk being excluded from many trade sectors altogether.

To move this along, I propose a global trade version of regulatory and tariff standards based on carbon gas emissions. During the first half of the twenty-first century we could have a market with very different rules, where carbon emission levels will serve as a basic yardstick for a nation’s participation in the global marketplace.

The carbon track made by each society will also be crucial to the image it projects to the world. Establishing this “green paradigm” will depend on determining how to measure carbon output and designating an organization that would receive the reports and verify the information. This will require a multilateral body vested with the consensus authority of participating governments. But ultimately, to be effective, this will require sanctions against vio-lators, most likely in the form of taxes (similar to tariffs) on products that exceed set limits and that are enforced by the governments. Fortunately there is already some precedent. In 1991, Sweden imposed a tax of 28 euros per ton of CO2 emitted. Currently, they levy a tax of 128 euros per ton of CO2 (except for exporting companies). Other Scandinavian countries have followed. France is debating a similar measure proposed by President Nicolas Sarkozy in early September this year.

Such a multilateral framework would break the deadlock between developed and developing countries and use the power of the global market to reduce carbon emissions.