Trade Policy and Climate Change in the Caribbean: Key Issues and Perspectives by Ginelle Greene

Trade Policy and Climate Change in the Caribbean: Key Issues and Perspectives Published by:

Trade Policy and Climate Change in the Caribbean: Key Issues and Perspectives

Table of contents List of abbreviations 05 Abstract 06 1. Introduction 07 2. Methodology 07 3. Some Key Facts about Climate Change (CC)

4. Trade Policy and Climate Change Intersections: The Case of the Caribbean

4.1. The Economic Implications of Climate Change

5. Climate Change (CC) & Trade within the Caribbean

6. The Current International Framework for CC and Trade Policy

7. Maximising Climate Change Opportunities in the Caribbean

7.1. Trade Related Opportunities 20 7.2. CARIFORUMâ&#x20AC;&#x2DC;s Trade in Environmental Goods Explored

7.3. CARIFORUMâ&#x20AC;&#x2DC;s Trade in Environmental Services

7.4. Identifying Other Opportunity Sectors

7.5. The Case Study of Barbados

7.6. Guiding the Way Forward 28

8. Climate Change (CC) & Innovation Governance

8.1. Adaptation and Mitigation Policy

8.2. Staying Ahead in a Low-Carbon Global Economy

8.3. The Role of Aid for Trade (AFT)

8.4. Important Factors for the Policy Making and Implementation Process

9. Conclusion 37 10. Recommendations 38 10.1. Country Specific Economic Opportunities Identified and Pursued

10.2. Leveraging Other Available Resources

10.3. An Appropriate CARIFORUM Policy Response

References 40 List of Figures and Tables 42

List of abbreviations

List of abbreviations AFT

Aid for Trade

B2B BL&P CC CARICOM CARIFORUM CCIC CONCORD CPC CSS CTS CREDP EG ES ETS GATT GATS GDP GEF GIZ IPCC IPR ISO LDC MTS MWH NAP NAPA R&D RPSDP SPS SWH TBT TPCCES TRIPS UNDP UNEP UNFCCC US USD UWI WB WCED WTO

Business to Business Barbados Light & Power Climate Change Caribbean Community Caribbean Community and the Dominican Republic Caribbean Climate Innovation Centre Confederation Europeanne des ONG dâ&#x20AC;&#x2DC;urgence et de developpment Customs Procedure Code Superior Council for Statistics Committee on Trade and Environment Caribbean Renewable Energy Development Programme Environmental Good Environmental Service Emissions Trading System General Agreement on Tariffs and Trade General Agreement on Trade in Services Gross Domestic Product Global Environment Facility Deutsche Gesellschaft fĂźr Internationale Zusammenarbeit Intergovernmental Panel on Climate Change Intellectual Property Rights International Organization for Standardization Least Developed Countries Multilateral Trading System Megawatt Hour National Adaptation Programme National Adaptation Programmes of Action Research & Development Regional Private Sector Development Programme Sanitary and Phytosanitary Measures Solar Water Heaters Technical Barriers to Trade Trade Policy, Climate Change and Environmental Sustainability Agreement on Trade Related Aspects of Intellectual Property Rights United Nations Development Programme United Nations Environment Programme United Nations Framework Convention on Climate Change United States United States Dollar University of the West Indies World Bank World Commission on Environment and Development World Trade Organization

Abstract

bstract The impacts of climate change (CC) are those which may have influenced not only the ecology of the Caribbean, but also its economic and trading activities. In this regard, climate change can impact on the efficiency of domestic production as well as international competitiveness. In efforts to adapt and mitigate climate change related problems, additional stress may be placed on, or deplete available natural resources. The Caribbeanâ&#x20AC;&#x2122;s contribution to this phenomenon has been minimal however. Characterised by concentrated economies as well as fragile terrestrial and maritime ecosystems, unsustainable actions have had an impact on degrading the regionâ&#x20AC;&#x2122;s environment (Edwin Laurent, 2013). The following provides an overview of the linkages between trade policy, climate change and environmental sustainability within the context of the Caribbean region. This is examined through various areas identified such as international transport and tourism, trade policy and the green agenda, economic diversification as well as sustainable energy.

Introduction and Methodology

Introduction

On September 19th and 20th, 2013 the UWI Consulting Company supported by the World Trade Organization Chair at the University of the West Indies (UWI), hosted a workshop on Trade Policy, Climate Change and Environmental Sustainability (TPCCES), at the Kapok Hotel, Port of Spain, Trinidad. The workshop was done in collaboration with the International Centre for Trade and Sustainable Development (ICTSD, Geneva) and the Trinidad and Tobago Coalition of Service Industries (TTCSI). The proceedings looked at the effects of mitigation and adaptation policies on key economic and

trade sectors, as well as the ecological effects of climate change within the Caribbean context. The workshop attracted more than fifty participants from the private sector, as well as from business support organizations (BSOs), governmental agencies, regional organizations, academia and donor community representatives. Participants had the opportunity to analyse and assess the trade and climate change governance scenario, formulate negotiation positions and identify strategic options to inform the policy- making decision process. The contents of this reports is largely based upon the many presentations made at the workshop, with reference made to other scholarly texts relevant to the issues addressed.

Methodology

The following report is largely based upon an analytical compilation of the technical presentations made by the key presenters at the Trade Policy Climate Change and Environmental Sustainability Conference held in Port-of-Spain Trinidad. In addition to this, reference was made to other scholarly sources such as articles, publications and books which examine this topic area from various

standpoints. Information was also utilized from sources such as the 2013 IPCC report amongst other research in the area of trade policy, climate change and the environment. To this end both qualitative and quantitative data is presented and examined below, to demonstrate the key effects of climate change as well as to identify opportunities available within the CARIFORUM region.

Some Key Facts about Climate Change (CC)

According to the International Energy Agency (IEA, 2014), Climate Change can be defined as â&#x20AC;&#x153;the change in climate (i.e. regional temperature, precipitation, extreme weather, etc.) caused by an increase in the greenhouse effectâ&#x20AC;?. The greenhouse effect, refers to the process by which greenhouse gases such as water vapour, CO2, methane, among others in the atmosphere absorb and re-emit heat being radiated from the earth, thus trapping warmth.

According to the IPCC (2013), the main drivers of climate change have been due to both natural and anthropogenic or man-made substances and processes, which have lead to increased CO2 levels in the atmosphere. However anthropogenic or man-made causes have been identified as the main driver of the rise in global atmospheric CO2 levels. According to the 2013 IPCC report, it is extremely likely that more than half of the observed increase in global average surface temperature from 1951 to 2010 was caused by the anthropogenic increase in greenhouse gas concentrations.

Diagram 3.1 Increasing Global trend of CO2 levels from the 1950 to 2010 period Source: IPCC, 2013

Diagram 3.2 Total anthropogenic CO2 emissions from 1870 Source: IPCC, 2013

Some Key Facts about Climate Change (CC)

The IPCC's report states that greenhouse gases contributed to a global mean surface warming ranging from 0.5°C to 1.3°C over the period of 1951 to 2010, with the contributions from other anthropogenic

sources, including the cooling effect of aerosols, to be in the average range of −0.6°C to 0.1°C. This has resulted in changing and more extreme weather patterns, as well as increased precipitation levels.

Diagram 3.3 Average global increase in temperature over the periods of 1986 to 2005 and 2081 to 2100. Source: IPCC, 2013

In a recent study the World Bank (WB, 2014) highlights that climate change can have a serious impact on the Caribbean. The organization's findings estimated a 4°C increase in global temperatures which would have disastrous consequences, including

increased frequency and intensity of storms, coastal erosion, and decline of fresh water resources. Additional research depicted that as a consequence, the cost for Caribbean countries could be up to 11 USD billion annually by 2025.

Diagram 3.4 Average global increase in precipitation over the periods of 1986 to 2005 and 2081 to 2100. Source: IPCC, 2013

Some Key Facts about Climate Change (CC)

The following seeks to examine the ability of developing countries' to adapt to the effects of climate change and the resultant trade related issues. To this end, several key definitions have been identified below which may prove to be relevant in such an analysis. •

Vulnerability to Climate Change - “The degree to which a system is susceptible to, or unable to cope with, adverse effects of climate change, including climate variability and extremes.” Such vulnerability is directly dependent on “the character, magnitude, and rate of climate change and variation to which a system is exposed, its sensitivity, and its adaptive capacity.”

•

Adaptation to Climate Change - “Adjustment in natural or human systems in response to actual or expected climatic stimuli or their effects, which moderates harm or exploits beneficial opportunities.”

•

Adaptive Capacity - “The ability of a system to adjust to climate change (including climate variability and extremes), to moderate potential damages, to take advantage of opportunities, or to cope with the consequences” (IPCC, 2007b).

A link may be observed between climate change and sustainable development which stems from the fact that climate change is a constraint to development, making developing countries such as the CARIFORUM states vulnerable. With the exception of Trinidad & Tobago, such countries have been characterized by national account deficits, lacking the “adaptive capacity” to take advantage of or cope with the consequences of such a phenomenon as outlined above. In this regard, the region has demonstrated a relative decline in exports earnings due to limited competitiveness, reduction of preferential trading agreements and an overall need for technological development (Keith Nurse, 2007). As such, the ability to leverage available resources to tackle such issues may prove critical when assessing the trade policy, climate change and the environment agenda. According to Osman (2008), strategies targeted towards sustainable development may have many common features to that addressing

climate change, so that the application of applying them together can lead to synergies. According to the World Trade Organization (2009), “Aid for Trade” can be described as development assistance provided in support of partner countries’ efforts to develop the basic economic structure and tools they need to expand their trade. Within the international arena trade has been viewed as a means of achieving such sustainable development for developing countries. This shared perspective has been depicted through initiatives such as the Doha Development Agenda and the Millennium Development Goals (MDGs)1. Through the multilateral aid system, 38 developing countries have received aid from around 25 donors in 2009 (OECD 2009). The Caribbean region has been amongst those who benefitted from such AFT funding. During the 2007 to 2011 timeframe, the CARIFORUM countries received up to 75.5 USD billion in Aid for Trade (AFT) funds (Vinaye Ancharaz, 2013). As such, the opportunity may exist for CARIFORUM states to strategically leverage such funds, by adopting a mutual application of climate change issues within the development agenda and vice versa.

1 According to the UNDP these goals are to; 1) Eradicate extreme poverty and hunger 2) Achieve universal primary education 3) Promote gender equality and empower women 4) reduce child mortality 5) Improve maternal health 6) Combat HIV/AIDS, malaria and other diseases 7) Ensure environmental sustainability and 8) Develop a global partnership for development.

Trade Policy and Climate Change Intersections: The Case of the Caribbean

According to Osman Elasha (2008) sustainable development may be defined as “development that meets the needs of the present without compromising the ability of the future generations to meet their own needs” (WCED, 1987). This entails “a harmonious integration of a sound and viable economy, responsible governance, people’s empowerment, social cohesion and ecological integrity.” The issue of environmental sustainability may thus be both directly and indirectly intrinsically linked to the goal of sustainable development with the linkages between trade, climate change and the environment being more extensively explored. The role of multilateral as well as other relevant local institutions may also be observed to be integrally linked to main issues at stake on the topic, in terms of the challenges encountered as well as current governance gaps which exist. To this end, one key area under discussion has been ‘Climate change mitigation’, particularly in the context of the production and consumption of goods and services.

Visitor Exports

2011 (US$bn)

4.1. The Economic Implications of Climate Change Climate change and trade policy topics may include issues related to industry standards such as ecolabelling, food miles and the carbon footprint of products and services. The services sector accounts for up to 80% of GDP for some Caribbean countries (Chaitoo, 2006). As such, in terms of the Caribbean's main economic activity, relevant issues for the nation states in this area would be significantly linked to the services industries upon which the economies are heavily reliant. The Caribbean is the most Tourism and Travel intensive region of the world. According to the Caribbean Hotel and Tourism Association (2011) the industry's total contribution amounted to 14% of GDP, 13% of employment, 12% of investment and 17% of exports.

Travel & Tourism‘s Direct Contribution to GDP

2011 % share

1 European Union

423.3

1 North Africa

5.8

2 North America

182.7

2 Caribbean

4.5

3 North East Asia

147.4

3 South East Asia

4.4

4 Other Europe

95.4

4 Latin America

3.2

5 South East Asia

87.7

5 European Union

3.2

6 Middle East

10.1

6 Middle East

2.9

7 Latin America

35.6

7 North America

2.9

8 Oceania

33.0

8 Sub Saharan Africa

2.7

9 Sub Saharan Africa

27.2

9 Oceania

2.6

10 Caribbean

24.7

10 North East Asia

2.5

11 North Africa

22.9

11 Other Europe

2.4

Table 4.1 The Tourism Industry’s 2011 Global Visitor Exports Source: World Travel & Tourism Council, 2012

Table 4.2 Global Travel and Tourism’s Direct Contribution to GDP, 2011 Source: World Travel & Tourism Council, 2012

Trade Policy and Climate Change Intersections: The Case of the Caribbean

Diagram 4.1 Long-Haul Travel and Destinations: Barbados, Mauritius & Fiji (share of long-haul in total arrivals) Source: Keith Nurse, Keron Niles, Denyse Dookie, 2009

Due to their lower latitudes Caribbean countries shall be among the first to experience the effects of climate change by the year 2030 according to a 1990 report. (Dr Kenrick Leslie, 2014). Selwin Hart (2014 also added that seven Caribbean countries were in the top ten of countries economically affected by climate change. Cletus Springer (2013) points out that Caribbean countries due to their economic and ecological characteristics are "socially", "economically" and "environmentally" vulnerable to "suffer harm from exposure to external and internal stresses and shocks". Caribbean economies are faced with several issues which include: •

A high degrees of openness;

•

Limited scope for diversification;

•

Dependence on a narrow range of exports;

•

High dependence on strategic imports;

•

Inability to influence international prices;

•

High intra-regional and international transport costs and

•

Geographic remoteness.

Springer (2013), further states that shocks to the environment can have catastrophic consequences

for the tourism economy which in the Caribbean is significantly based upon environmental features as well as assets. The ability to build resilience to the influence which climate change related issues may thus be significantly linked to the overall sustainable development of the region. Consequently, climate change mitigation and adaptation issues within a region characterized by island states may have significant impact on Caribbean economies, particularly as long haul destinations. Pollution from the aviation and shipping sectors may lead to severe economic consequences due to the degradation of natural resources such as the coastline and coral reefs, upon which the tourism industry is reliant. Particularly for countries such as Barbados and the OECS states where the tourism sector is intrinsically linked to coastal activities. An example of such may be observed for the Dutch Antilles islands where up to US$500 million of annual earnings comes from the scuba diving industry (Dr. Kenrick Leslie, 2014). The IPCC (2013) highlighted that issues such as ocean acidification, rise in global heat levels and changes in weather patterns could pose severe threats to ecosystems upon which tropical countries' economies rely.

Trade Policy and Climate Change Intersections: The Case of the Caribbean

Diagram 4.2 Change in ocean surface pH during the periods of 1986 to 2005 and 2081 to 2100 Source: IPCC, 2013

Ocean acidification is another issue which may be faced, and refers to a reduction in pH of the ocean over an extended period, usually decades or longer caused primarily by the uptake of carbon dioxide (CO2) from the atmosphere. According to scholarly research, the oceanâ&#x20AC;&#x2122;s uptake of carbon dioxide is having a significant impact on the chemistry of seawater and may be linked to man-made causes (Feely et al., 2009). As such anthropogenic ocean acidification is another relevant phenomenon, which refers to the component of pH reduction that is caused by human activity (IPCC, 2011).

Diagram 4.3 Carbon Dioxide Emissions per capita in the year 2000 Source: FAO, 2009

Results from scientific studies as well as evidence from geological records, clearly indicate that marine ecosystems such as those of the Caribbean region, are highly susceptible to the increases in oceanic CO2 as well as the corresponding decreases in pH and carbonate ion. According to Fabry et al., 2008, this occurrence reduces the concentration of carbonate ion and can affect shell formation for marine animals such as corals, plankton, and shellfish (IPCC, 2013), all natural resources integral to the Caribbean tourism industry. As seen in the diagram below, the Caribbean region is highly

Trade Policy and Climate Change Intersections: The Case of the Caribbean

vulnerable to this phenomenon despite being a low emitter of greenhouse gases itself, due to its close proximity to one of the highest CO2 emitting areas in the world, the United States (US). As such it is within the interest of CARIFORUM states to react to the economic and natural impacts

which climate change may have on their countries. Observed below are the overall economic costs of inaction to the implications of climate change within Caribbean countries such as Haiti and select OECS states, which have been estimated to an overall loss valued up to 75% of GDP.

% Est. Economic Impact

Countries

(share GDP Loss)

Caribbean

Latin America and the Caribbean

137

Dominica, Haiti, St. Kitts & Nevis, Grenada, Turks & Caicos

Table 4.3 Cost of Inaction in the Caribbean by the year 2100 Table showing Cost of Inaction in the Caribbean by the year 2100 Source: Ram贸n Bueno, Cornelia Herzfeld, Elizabeth A. Stanton, and Frank Ackerman, 2008

In the Caribbean, 57% of total tourist arrivals are from long-haul destinations such from the UK and Germany (Keith Nurse, 2013). Carbon emissions particularly relevant to the region may be consequently linked to the aviation sector, as well as activity related to the cruise liner and shipping industries. According to Ancharaz 2013, the Caribbean and Panama Canal regions which are highly dependent on import and export activities are the most polluted

Diagram 4.4 Economic Impact of Maritime Transport (US$30 tonne CO2) Source: ICTSD, 2010

from shipping activity. As such, the carbon footprint of transported goods may be notable. World shipping is estimated to contribute 1.12bn tonnes of CO2, or nearly 4.5% of all global emissions of the main greenhouse gas. In addition to this, the International Council on Clean Transportation, reports that in 2005 ships produced 27% of the world's total nitrogen- oxide emissions, which contribute to smog and global warming.

Trade Policy and Climate Change Intersections: The Case of the Caribbean

Other relevant policy responses from the international community include the EU's 2012 decision for airlines flying within, into, or out of the European Union (EU) to be subject to an Emissions Trading System (ETS). The EU’s decision meant that from the year 2012, the ETS would be applicable to all flights that take off from and land in the EU. China is now similarly considering installing its own carbon emissions trading scheme by the year 2015. The replication of such a policy may ultimately have implications if adopted by other states from which the Caribbean region relies on for the Tourism and Travel industry.

In this context, Small Island Developing States (SIDS) such as the Caribbean countries may be considered among the most vulnerable to climate change (Vinaye Ancharaz, 2013). Ancharaz identified the agriculture and tourism sectors as the most exposed to climate change induced events. The Caribbean region is particularly characterized by food security problems, demonstrated by extremely high food import bills estimated at an average value of 4 billion USD in 2008 (FAO, 2011). The above has consequently prompted several responses from the international community. To date the proposed policy response from the aviation sector to reduce emissions have involved measures which include: •

Improvements in technology- new aircrafts which burn 17% to 30% less fuel;

•

Improvements in air traffic controls- efforts to streamline 34 air traffic control agencies into one which is estimated to reduce emissions by 12% and to save approximately 4.5 USD billion, as well as;

•

The use of Bio fuels- however a main concern here is whether such activities will compete with food production activities.

In terms of the aviation sector under the multilateral system, such policy prescriptions may be guided by international legal frameworks, for example principles outlined under the 2010 International Civil Aviation Organization (ICAO) Resolution A37-19. This text urges states "to respect the guiding principles listed in the Annex when designing new and implementing existing MBMs [market-based measures] for international aviation". However Joachim Monkelbaan (2013) highlights, that the introduction of any new policy may still lead to increased costs for operating airlines and thus have economic impli-

International Tourism as a % of GDP, 2009 to 2012 period 30 % 25 % 20 % 15 %

International Tourism as a % of GDP for the 2009 to 2012 period

10 % 5% Bahamas, The

Antigua and Barbuda

St. Lucia

Barbados

Dominica

Belize

Jamaica

Diagram 4.5 International Tourism as a % of GDP, 2009 to 2012 period Source: World DataBank, 2015

Mauritius

Grenada

St. Vincent and the ...

St. Kitts and Nevis

Dominican Republic

Singapore

Costa Rica

Australia

Germany

United States

Trade Policy and Climate Change Intersections: The Case of the Caribbean

cations for relevant tourist dependent destinations such as those highlighted graphically below. Scott and Rajamani (2011) highlight that â&#x20AC;&#x153;The nature of the burden imposed by the ETS on businesses will depend in part upon the behaviour of states and upon whether developed and developing countries have themselves taken measures to reduce the climate change impact of flights". This statement reinforces the need for developing countries such as the CARIFORUM states to draft and implement their own policies in response to climate change within the context of their regional sustainable development goals.

Climate Change (CC) & Trade within the Caribbean

Vinaye Ancharaz (2013) points out that Climate Change (CC) may have implications on the competitiveness of economies, which in turn can affect trade activity. Caribbean countries possess economies highly dependent on the tourism sector, as such adaptation to achieve resilience has become imperative in the process of sustainable development. However current climate change funds may be inadequate or inaccessible to poor developing countries (Ancharaz, 2013). Where linkages can be made to trade impacts, the role of Aid for Trade (AFT) in this context may prove valuable towards achieving such resilience. In this regard trade related official development assistance from bilateral, plurilateral and multilateral arrangements may be of significance when addressing CC and its consequent trade related issues.

Diagram 5.1 Linkages between Trade Policy & Climate Change Source: Keith Nurse, 2013

This may particularly be the case, where the rise in sea level and “CC-induced extreme weather events can damage infrastructure, disrupt markets and production networks” (Vinaye Ancharaz, 2013). The role of trade policy in addressing these issues may prove critical here in terms of environmental protection and mitigation activities. This has been observed to be embodied in the proliferation of non-tariff measures in other countries, for example associated to the trade in Environment Goods (EGs), which may include: •

Local content requirements;

•

Clean energy subsidies;

•

Export restrictions/taxes;

•

Government procurement rules as well as;

•

Standards and certification (SPS, TBT, and private standards such as food miles, carbon footprint, eco-labeling).

The Current International Framework for Climate Change and Trade Policy

International legal texts such as the UNFCCC and the Kyoto Protocol do not contain any explicit trade measures in their texts concerning the environment. The only exception to this may be observed under UNFCCC Art. 3.5, which states: “Measures taken to combat climate change, including unilateral ones, should not constitute a means of arbitrary or unjustifiable discrimination or a disguised restriction on international trade.” Other relevant references to the environment within trade policy text may be found under: •

The GATT Art. XX (1947)- which states two relevant instances where Members can be exempted from GATT rules under subparagraphs (b) and (g) [see table on page 15];

•

The Rio Declaration (1992)- this agreement on environment and development, recognized the contribution which trade and the Multilate-

International Agreement/ Regulation

ral Trading System (MTS) could make towards sustainable development; •

The preamble to the Marrakesh Agreement (1994)- states that production and trade should not compromise environmental sustainability and

•

The Marrakesh Decision which led to the establishment of the Committee on Trade and Environment (CTE) at the WTO.

In general, the overarching aim of the above legal references was to make trade and environmental policies mutually supportive to one another. However focus has been more so placed in relation to national security reasons, or on preventing the use of the environment as a means to restrict international trade. This may be observed to be more explicitly depicted in the legal excerpts provided below.

Details

General Agreement on Tariffs and Trade (GATT)

Art. XX (General Exceptions) states two instances where members can be exempted from GATT rules, where: (b): “necessary to protect human, animal or plant life or health” (g): “relating to conservation of exhaustible natural resources” Chapeau: Above measures not to be applied in a manner which would constitute “a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail” or as a “disguised restriction on international trade”

General Agreement on Trade in Services (GATS)

Art. XXIV (exceptions similar to GATT Art. XX (b))

Technical Barriers to Trade (TBT)

Right of Members to use specific technical regulation for the protection of human, animal and plant life or health.

Sanitary and Phytosanitary Measures (SPS)

Right of Members to take sanitary and phytosanitary measures necessary for the protection of human, animal or plant life or health.

The Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS)

Right to exclude inventions from patentability where this is necessary to protect the environment

Table 6.1 Key Relevant WTO Provisions on the Environment Source: Vinaye Ancharaz, 2013a

Maximising Climate Change Opportunities in the Caribbean

7.1. Trade Related Opportunities According to the OECD, the environmental industry may be defined as the “activities which produce goods and services to measure, prevent, limit, minimize or correct environmental damage to water, air and soil, as well as problems related to waste, noise and ecosystems” (Joachim Monkelbaan, 2013). Environmental goods (EGs) and services may be utilized as a tool for the export diversification, economic and social advancement of Caribbean economies. According to Dutz and Sharma (2012), a country’s potential export of environmental goods may be projected based upon existing productive structures and export baskets, estimated through analysis of actual exports in ‘close-to-green good product areas’. Dutz and Sharma developed an innovative methodology which explored the potential export of EGs

from low income countries. However this approach does not provide further details on which countries this potential applies to, or the list of specific products identified. According to Jodie Keane (2013), Hausmann and Klinger’s (2006) ‘product proximity methodology’ was adapted in order to obtain the list of EGs which has been under discussion by WTO members, and which has been published by the OECD. This list is then matched to trade data through the Superior Council for Statistics (CSS), available from the United Nations’ COMTRADE database. Based upon this, identification may be done of those environmental goods which have been exported over the 2006 to 2011 period. According to Keane (2013), this method may be used to calculate the probability that a country will export a particular environmental good, by making comparisons to its current export portfolio e.g. which products seem to be closest to EGs. That is, given the productive capacity which already exists within a country.

Export of EGs as a Percentage of Total Exports (2011 or nearest year) Trinidad and Tobago St Vincent St Lucia St Kitts Jamaica Guyana Grenada Dominica Belize Barbados Bahamas Antigua and Barbuda 0

Diagram 7.1 Export of EGs as a Percentage of Total Exports (2011 or nearest year) Source: Jodie Keane, 2013

Trinidad & Tobago

St Vincent

St Lucia

Jamaica

Guyana

Barbados

Bahamas

Product

Antigua

Maximising Climate Change Opportunities in the Caribbean

Centrifuges, including centrifugal

Instruments + apparatus for measuri

Instruments + apparatus for physica Limestone flux; limestone and other

Machinery, plant or laboratory equi

Machines and mechanical appliances

Measuring or checking instruments,

Other articles of plastics and arti

Paints and varnishes (including ena

Parts and accessories of the motor x

Parts suitable for use solely or pr

x x

Phosphinates (hypophosphites), phos x

Pumps for liquids, whether or not f

Reaction initiators, reaction accel

Reservoirs, tanks, vats and similar

Sodium hydroxide (caustic soda); po

x x

Tableware, kitchenware, other house

Tanks, casks, drums, cans, boxes an

Taps, cocks, valves and similar app

Undenatured ethyl alcohol of an alc Waters, including natural or artifi

Overall Count of all Products

Table 7.1 Examples of Types of EGs Exported Source: Jodie Keane, 2013

Based upon the above, the top Caribbean exporters of environmental goods during 2011 were the countries of Trinidad & Tobago, Jamaica, St. Lucia and Barbados. However, the Caribbean countries which depicted the most diversification in the type of environmental goods they exported were

that of Trinidad & Tobago, followed by St. Lucia and Barbados. These countries exported mostly products such as ‘other articles of plastic’, ‘waters, including natural’, ‘tableware, kitchenware’ and ‘tanks, casks, drums, cans, boxes’ (Jodie Keane, 2013).

Maximising Climate Change Opportunities in the Caribbean

7.2. CARIFORUM’s Trade in Environmental Goods Explored In terms of CARIFORUM‘s export activity within the trade of environmental products, the top exporter for the region was observed to be Jamaica which

represented 98% of the region‘s export activity. Jamaica‘s main environmental export was in the area of “Undenatured Ethanol”. This was followed by Barbados and Trinidad & Tobago with a collective 0.7% of CARIFORUM‘s overall environmental goods exports, in the area of “Other water heaters”.

Overview-AGGREGATE TRADE IN SELECT PRODUCTS for the CARIBBEAN Source: COMTRADE using WITS TOP EXPORTERS AND EXPORT VALUES 2010-2012 (USD Millions) [In case of smaller values figures in USD indicated in square brackets]

Product (HS Code)

220710 (Undenatured Ethanol)

220720 (Denatured Ethanol)

841919 (other water heaters) includes solar

850231 Wind Turbines

2010

2011

2012

intraCaribbean

World

intraCaribbean

World

intraCaribbean

World

Trinidad and Tobago

Jamaica

Dominican Republic

Jamaica

Barbados

Jamaica

1.7

48.1

0.1

8.7

0.1

179.2

Dominican Republic

Barbados

0.1

0.2

0.0 [21440]

0.2

0.0 [1594]

0.0 [1873]

Barbados

0.3

Trinidad and Tobago

Aruba

0.0 [2238]

0.0 [39480]

0.0 [11059]

Table 7.2 Top Exporters and Export Values 2010-2012 (USD Millions) Source: Joachim Monkelbaan, 2013

On the other side of the spectrum, overall the top imported environmental products by CARIFORUM states were energy related in nature. The Caribbean region is characterized by one of the world‘s highest per capita energy costs, heavily reliant on high price imported distillate and heavy fuel oil (Nexant, 2010). In this regard, Jamaica was observed to be the largest CARIFORUM importer of environmental products in the region, accounting for 97.5% or 704.7 USD

million of the region‘s imports, particularly for the product ‘Ethanol’. The Dominican Republic followed by St. Vincent & The Grenadines demonstrated the next highest demand within the region for the import of environmental products, with values of 13.3 USD million and 0.5 USD million respectively during the 2010 to 2012 period (Joachim Monkelbaan, 2013).

Maximising Climate Change Opportunities in the Caribbean

Caribbean imports of HS RE products, based on export data reported by trading partners (USD Millions)

Products

2008

2009

2010

2011

2012

Accumulated Values (2008-12)

Ethanol (HS 2207)

314.8

224.2

122.8

274.6

212.8

1149.2

Small-hydro (841011+841012)

1.1

0.5

1.2

0.9

0.5

4.1

Other Water Heaters (HS 841919)

5.0

7.1

4.5

4.2

4.3

25.1

Wind Turbines (HS 850231)

5.1

40.2

20.7

1.2

27.3

94.5

Solar PV Panels (HS 854140)

16.2

16.6

19.6

15.8

23.5

91.7

TOTAL

342.2

288.6

168.8

296.7

268.4

1364.6

Table 7.3 Caribbean imports of HS RE products, based on export data reported by trading partners (USD Millions) Source: Joachim Monkelbaan, 2013

Based upon the overall observed demand patterns demonstrated by CARIFORUM importers of environmental products, particular policies may be put in place by governments to facilitate trade and to address local demands. According to a Nexant (2010) report for the World Bank, a scenario in which interconnection or renewable energy is introduced

within a regional Caribbean strategy, shows savings worth up to 32 USD billion under a base case scenario. I.C.L.E.I. (2009) highlights that local governments can play an active role in achieving such savings. As such, the link to trade policy may be particularly significant, in terms of the impact which renewables may have to enhance the competitiveness of CARIFORUM SMEs through energy savings.

Maximising Climate Change Opportunities in the Caribbean

Aquisition

Improvement of product or process

Technological leap in the generation of value

Imitation

Creative Imitation Adaptation

Technological Innovation

Foreign District Investment

Research and Development

Licenses

Knowledge Incorporation

Capital Goods

IP Creation

Cooperation Between Companies Knowledge Incorporation

Sales of Licenses

Sale of Patents Licenses

Export Development Import Replacement

Trade Policy Measures

Liberalization of EGS

Technology Transfer

Domestic Value Added

Technology Upgrading

Diagram 7.2 Possible linkages between trade policy on the competitiveness of SMEs in the renewable energy sector Source: Keith Nurse, 2013

If implemented in areas such as agriculture and energy, the appropriate policies can help reduce CC’s negative impacts. For example, policy instruments can promote institutional support through measures such as insurance which can help reduce risks. The promotion of diversification can additionally reduce the impact of economic volatility, while moving up the supply chain can increase income and reduce vulnerability. To this end, other market opportunities may be exploited such as the development of organic agriculture production. The global market for organic food and beverages is projected to grow to 105 USD billion by 2015, from the total value of 62.9 USD billion in 2011. Ultimately, any trade and CC policy developed should not themselves further damage the environment, but should benefit from new international opportunities and regulations, as well as minimise the adverse consequences due to the actions of others (Edwin Laurent, 2013).

7.3. CARIFORUM’s Trade in Environmental Services In the Caribbean the role of the services sector may be highlighted as a critical instrument towards development, contributing to more than 50% of GDP for most countries (ECLAC 2003). According to Nurse (2013), many renewable energy technologies exist in the public domain. As such, opportunities exist to leverage such information available to the benefit of the CARIFORUM region. However in order for CARIFORUM states to effectively maximize such opportunities Nurse (2013) highlights several policy recommendations which should be put in place: • Licensing guidelines of renewables - these should be reasonable with a fair declaration on Intellectual Property Rights (IPRs) and access to CC technologies; • R&D collaborations between Big South and Developing Countries - the need for alternative innovation models and

Maximising Climate Change Opportunities in the Caribbean

•

Developing countries‘ expansion of R&D investments in the area of energy renewables.

Nurse (2013) goes on to highlight that climate Change may prove to be a useful platform to promote alternative development. The use of renewable energy is one such example already present in the Caribbean, demonstrated by the increased use of solar energy in domestic homes and hotels in the case of Barbados. In this regard, the commercial viability may be explored in the services surrounding the production and export of renewable energy technologies. Strategic policies implemented within the private sector may leverage on such available opportunities for SMEs where: •

Climate Change can be used as a platform to promote alternative development in areas of renewable energy: – Particularly solar energy (with increased usage in homes and Hotels) and – The production and export of renewable energy technologies (e.g. the case of solar water heater production in Barbados);

The 2005 Network of Heads of European Environmental Protection Agencies‘ report, highlighted that with a modern approach to environmental regulation countries can experience benefits such as: •

reduced costs for industry and business;

•

market creation for environmental goods and services;

•

innovation;

•

reduced business risk and increased confidence of the investment markets and insurers;

•

assisted competitive advantage and competitive markets created;

•

job creation and sustained jobs;

•

improved health of the workforce and the wider public;

•

protection of natural resources on which business and wider society depends.

The above reduced costs have the potential to add up to substantial economy-wide benefits. The report states that businesses can benefit directly from environmental regulation particularly in areas such as energy efficiency and waste reduction, delivering cost savings and helping companies to develop more attractive products. In this regard, research related to the UK market suggested that waste minimisation could yield a value of almost 4.4 billion Euros, due to savings in manufacturers’ annual operating costs. This was the equivalent to 7% of profits in 2000. Additionally, through energy efficiency, a value of 2.7 billion Euros could be saved. Typical payback periods for waste investments have been forecasted to be no longer than a 12 month timeframe, with the agriculture sector possessing the potential to save approximately 1.3 billion Euros through improved environmental management practices.

•

Encouraged use of environmentally technologies promotes the green industry and its many associated services e.g. in the installation and maintenance of EGs, which can further facilitate proliferation of trade in environmental goods and services;

•

Firms may be encouraged to invest in energyefficient technologies to enhance efficiency and

•

competitiveness, particularly relevant to developing country SMEs;

•

Increased investment in R&D facilitate lesser dependence upon technology transfer from developed nations;

•

Some Caribbean countries strategically position themselves as Carbon Neutral tourism zones and

7.4. Identifying Other Opportunity Sectors

•

The encouraged development of non-traditional branches of tourism is adopted, that is: – A shift to low-volume, high-value tourism and – A shift to pro-poor, eco-friendly tourism.

Based upon the above, the Caribbean context several other economic opportunities may be identified concerning the trade in environmental goods and services, particularly in the following areas:

Maximising Climate Change Opportunities in the Caribbean

The Manufacturing Sector According to Pamela Coke-Hamilton (2012) “The manufacturing sector plays a critical role in strengthening the region’s capacity to be competitive in all sectors”. Based upon a study of five major manufacturing CARIFORUM exporters21, the Universitat Pompeu Fabra supports this statement. The organization specifically highlights importance in the “manufacture of alcoholic drinks (mainly rum and beer” in the Dominican Republic, Jamaica and St. Kitts & Nevis as well as of “non-alcoholic drinks, pasta, condiments, tobacco, jams, and dairy products” to the Dominican Republic. Consequently, opportunity may exist to add value to food products through their processing stages. According to the United Nations Environment Programme (UNEP), there has been a 1,500 per cent increase in global ISO 14001 certifications on environmental management awarded between the 1999 and 2009 period, which brands a business as being environmentally responsible. In this context, the Caribbean can benefit from opportunities being created for environmentally friendly goods or products which comply with sustainability standards, for example eco-labelled products and processes. Fisheries and Aquaculture sector In its 1996 report the FAO stated that the fisheries and aquaculture sectors played a key economic role within some of the Caribbean countries, particularly in coastal areas. The industry was highlighted to have been a direct or indirect main source of employment and livelihood. It was estimated that the fisheries sector provided employment to hundreds of thousands of persons, most of this generated in coastal areas often far from urban settlements, representing further economic and social benefits that also addressed regional development requirements (FAO, 1996). In the year 2011, Fish and the trade in fish products was estimated to be valued at 125 USD billion, however 80% of world fish resources were overexploited. 2 Antigua & Barbuda, Dominican Republic, Jamaica, Suriname and Trinidad & Tobago.

In light of this, demand for seafood that has been farmed in line with organic and/or broader sustainability standards has grown steadily in the last 15 years. Market projections estimate that the total value of the demand for seafood that has been farmed according to certified sustainability standards is forecasted to increase from 300 USD million in 2008 to 1.25 USD billion by 2015 (Edwin Laurent, 2013). Eco-tourism in the Caribbean Laurent (2013) points out that the tourism sector contributes to both water and air pollution, additionally placing pressure on waste management systems. However the potential exists for sustainable tourism within the Caribbean with new opportunities emerging from the growing environmental, social and cultural awareness of visitors. In this regard, the Caribbean region demonstrates numerous examples of countries with tremendous earning capacity as eco-tourism revenue earners. Examples may be pinpointed from Dominica’s nature trails, to Belize’s Mayan ruins, St Lucia‘s drive-in volcano, the Sulphur Springs or the historic Pigeon Island reserve. In addition to this, linkages could be made to prime seasonal activities such as festival tourism depicted by Trinidad and Tobago’s Carnival, Barbados’ ‘Cropover’ and St Lucia’s Jazz Festival. The adoption of the sustainability certification approach here, may provide a valuable marketing tool while also making it possible to secure additional price premiums in already active economic areas.

Maximising Climate Change Opportunities in the Caribbean

7.5. The Case Study of Barbados To date few Caribbean countries have been observed to significantly optimise economic opportunities available from global CC mitigation and adaptation efforts. Barbados was one Caribbean country which

engaged in such economic activity linked to the CC phenomenon. In the case of Barbados such efforts were linked to overcoming the domestic issue of high energy prices, an issue faced by many Caribbean countries (Keith, Nurse, 2013).

The Case of Barbados Market Conditions for Solar Water Heater (SWHs) in Barbados: • Extremely high electricity tariffs; • Relatively high consumer purchasing power; • Very active government pro-SWH incentive programs; • High level of local content and entrepreneurship; • Low barriers to entry - e.g. intellectual property in the public domain and • Local champion- high backing by the prime minister. Economic Impacts to date: • An export value of approximately 270,000 USD per annum; • Over the 1974 to 2010 period more than 50,000 SWH installed for a 200,000 population, have lead to over 100,000 MWH of energy saved as well as millions of dollars worth of fossil-fuel imports every year and millions of tonnes of carbon-dioxide emissions; • Each unit on average saves 428 tonnes of energy per year (21,400 tonnes); • Total consumer savings have amounted to 425 USD million; • Tax Benefit (one time) have amounted to 62.5 USD million and • Barbados saved 15,000 metric tonnes of emissions (4.5% of all emissions) and 130,000 barrels of oil during the 1974 to 2010 period. Challenges Encountered:

• • • • •

Table 7.4 Source: Keith Nurse, 2013

Accessibility of Incentives - the hotel sector has yet to take up incentives for use of solar technology by the government due to poor structure of the enterprise growth fund through which finances may be accessed; Legislative and Policy Shortcomings - e.g. in the area of grid connection; there is no legislation in place to allow for the national power company BL&P to buy power from individuals, therefore it is currently illegal to do so; Limited Public Awareness - a lack of a national marketing programmes for the promotion of solar power benefits and opportunities; Entrenched Interests - BL&P has placed a limit on the number of installations to 200 units per building. In addition to this the ‘feed in tariff’ is very high with a long payback time and Structural Problem of Compatibility - Most power companies possess a 60 cycle base, however Barbados has a 50 cycle base.

Maximising Climate Change Opportunities in the Caribbean

7.6. Guiding the Way Forward Supported by the Barbados case study experience, several key observations may be made when examining the provision of trade policy support related to the green economy in developing countries: •

The need for guidelines concerning the licensing of renewables - this should be reasonable with fair declaration on IPRs made as well as access to CC technologies ensured;

•

The benefits of collaborative R&D between Big South and Developing Countries - the need for alternative innovation models which effectively target individual domestic market conditions such as high energy costs in the Caribbean;

•

Developing countries need to expand R&D investments towards renewable energy in order to ensure greater energy independence, and facilitate the increased competitiveness of local SMEs and

•

The exploration of opportunities in sub-sectors, such as eco-tourism- this offers potentials which focus on: – nature-based activities; – cultural heritage festivals and – adventure holidays.

Monkelbaan (2013) highlights that SIDS such as the CARIFORUM countries, face a number of constraints towards achieving export diversification. Such issues include the small size of markets which make achieving economies of scale difficult, as well as geographic remoteness which affects the competitiveness of products (Vossenaar, 2004). However Monkelbaan also indicated that the imports of climate-friendly products can play an important role towards the sustainable development of

the Caribbean. Benefits may include costs and other resource savings, as well as lowering the energy and carbon footprint of economically important sectors such as tourism. In this regard, the growing global ‘Sustainable Energy’ industry may be an ideal platform from which CARIFOURM countries can leverage the growing global demand for an alternative to fossil based energy. A key question which Monkelbaan (2013) asks, is how to best exploit such “synergies found between climate-friendly goods and climate-friendly services as well as other economically important service sectors such as tourism and shipping in the Caribbean?”. To this end, he identifies financial services as one of various other key areas, under which complementary services critical for the development of the sustainable energy sector may be explored. According to the Caribbean Export Development Agency (2012), financial services represent the second largest contributors to the gross domestic product (GDP) of the Caribbean region. For the countries of St. Lucia, St. Kitts and Nevis, Montserrat, Antigua and Barbuda, Barbados and the Bahamas the financial services sector contributed over 20 per cent to GDP in the year 2011. The sector also represents an area of significant economic activity for the rest of the region, representing 17% of GDP for the CARIFORUM states in the year 2011 (Joellen Laryea, 2014). As such potential exists for the region to diversify its activities into one of the key service areas for the supply of sustainable energy. Other sectors identified as critical for the development of the sustainable energy sector include ‘Construction services’ (CPC 54), ‘Other Professional, business and technical services’ e.g. engineering (CPC 83) and ‘Telecommunications’ (CPC 84).

Climate Change (CC) & Innovation Governance

8.1. Adaptation and Mitigation Policy “The development of effective climate change policies and their harmonious accommodation in trade rules pose major, perhaps unprecedented, challenges to international governance”. Pascal Lamy, WTO Secretary General, WTO News, June 26, 2009 (Nurse, 2013). As alluded to above by former WTO Secretary General, any economic activity as it relates to environmental goods and services needs to be accompanied by the right policy to effectively exploit opportunities. To this end several types of CC policy instruments may be explored or employed when seeking to implement policies which aim to either support or regulate the activities of the green economy. Such policy instruments may include:

8.2. Staying Ahead in a Low-Carbon Global Economy According to the Overseas Development Institute (ODI, 2014), “Over the next ten years, global trade patterns will be transformed by natural resource scarcity, climate change and international mitigation policies, resulting in an inevitable shift to a low-carbon global economy.” As such in order for developing countries such as the Caribbean states to remain competitive, several measures should be put in place to leverage opportunities available and overcome foreseen constraints. To this end several policy recommendations were made by the ODI (2014) which included the below key areas: •

Development of a green-energy sector The Caribbean region is characterized by one of the world‘s highest per capita energy costs. According to the ODI (2014), renewable energy costs are expected to fall as technologies mature. This would avoid the need for any future costly mitigation measures and could be supported through new sources of climate finance;

•

Use of fossil fuel reserves wisely Between the years of 2010 and 2011 the petroleum industry contributed to 40% of Trinidad & Tobago’s GDP31. Countries such as Trinidad & Tobago Countries which are heavily reliant on fossil-fuel reserves, should take strategic actions to utilise such resources towards supporting the development of the renewable energy sector;

•

Take advantage of firms’ innovation to generate their own green electricity The ODI (2014) highlighted the example of Kenyan manufacturing and agribusiness firms investing in their own mini-hydro power plants, geothermal plants, co-generation from sugar production, solar panels and wasteto-energy installations. Within the Caribbean, the case of Barbados in the area of solar water heaters and photovoltaic technology for electricity generation may be similarly examined in terms of innovation policy and its impact on a small island economy;

1. Border measures (e.g. carbon taxes or levies) via: – Production subsidies (e.g. free allowances and exemptions) or – Performance standards (e.g. carbon labelling and efficiency standards); 2. CC trade liberalization which identifies the environmental products that may benefit from liberalisation as well as complimentary services. The application of such measures may be guided by principles already outlined under current international frameworks such Para 31 of the Doha Ministerial Declaration which aims to “reduce or as appropriate, eliminate tariffs and non-tariff barriers, on environmental goods and services.” (Monkelbaan, 2013); 3. The facilitation of technology transfer and proliferation of Intellectual Property Rights (IPRs); 4. A shift in corporate policy which adopts more of a project approach to negotiations for EGS. This will require the formulation of specific product and services alliances, rooted within a growth and development agenda with the appropriate sensitising and flanking measures put in place and 5. A shift in consumer preferences towards greater demand for that of environmentally friendly goods and services.

3 Central Statistical Office, Ministry of Planning and Sustainable Development Trinidad & Tobago, 2012.

•

Climate Change (CC) & Innovation Governance

Promote energy-efficiency measures This refers to the investment of Private sector firms in energy efficiency. An example of this may be observed in Kenya where mandatory energy audits were introduced (ODI, 2014); Remove fossil-fuel subsidies According to the ODI (2014), “subsidizing fossil fuels encourages inefficient energy use, undermines competitiveness and incentives for development of renewables, and imposes a heavy financial burden”. Concern has been raised by the IMF (2013) concerning the heavily subsidized domestic market of Trinidad & Tobago. The financial institution pointed out, that such costly fuel subsidies may disproportionately benefit the wealthy while contributing to severe road congestion. The IMF (2013) proceeded to recommend phased removal of such subsidies over a medium- term basis. This may be accompanied by the promotion of alternative energy sources which aim towards the implementation of a sustainable green economy policy framework. Take advantage of the growing market for biofuels Global demand is expected to more than double over the 2010-2020 period with biofuels estimated to have a higher income potential than that of traditional crops (ODI, 2014). The 1983 Caribbean Basin Initiative (CBI) facilitates conditions which give Caribbean countries an advantage in this area over their Latin American counterparts. Such an advantage may be leverage for economic gain by the region supported by strong institutions in the legal or political and regulatory frameworks. Implement environmental regulation, standards or certification in the manufacturing sector The role of trade policy may prove integral here towards addressing compliance with certification and international standards requirements for non-tariff measures which can pose technical barriers to trade (TBT) for developing economies such as Caribbean states. An example of this may be observed by a Barbadian beer

company, ’10 Saint’s Brewery Co. Ltd.’ which needed to comply with a local German recycling programme in order to successfully export to the target market (Glyn Partridge, 2014). •

Support farmers in the transition to sustainable agricultural practices and carbon footprinting The region is particularly characterized by food security problems, demonstrated by extremely high food import bills estimated at an average value of 4 billion USD in 2008 (FAO, 2011). Consequently, support should be provided in order to “meet future certification requirements, enhance yields, ensure long-term sustainability of production, and capitalize on projected rising global food prices” (ODI, 2014).

•

Develop economic sectors that capitalize on forest resources and encourage sustainable forest management Caribbean countries have already capitalised on their wildlife and nature in this manner with tremendous earning capacity as eco-tourism revenue earners. The ecotourism demonstrates a fast growing sector at around 20% per year with new opportunities emerging from the growing environmental, social and cultural awareness of visitors (ODI, 2014). However, according to the ODI (2014) the implementation of private sector regulations which include incentives such as tax breaks, legislation changes and public awareness campaigns may help with the sustainable management of opportunities in this area.

•

Establish green credentials for the country’s tourism sector The ODI (2014) highlights the significance of stablishing a brand such as a ‘green tourism destination’ which may prove be important towards creating a competitive advantage. In addition to this, policies which encourage the development of non-traditional branches of tourism may be also adopted, particularly for Caribbean economies which are heavily reliant on the Tourism industry (Caribbean Hotel and Tourism Association, 2011).

Climate Change (CC) & Innovation Governance

8.3. The Role of Aid for Trade (AFT) The effectiveness of such trade and environmental policies can be further reinforced by AFT activity.

During the 2007 to 2011 period the Caribbean region received a total of 124 USD billion in ODA assistance. Out of this total a substantial proportion, 60% or 75.4 USD billion of ODA was attributed towards AFT.

Aid for Trade to Caribbean countries, 2007–2011 (USD million) 2007

2008

2009

2010

2011

ODA Disbursements

1548.4

1876.7

2151.1

4154.5

2673.7

AFT Disbursements

831.3

1013.1

1142.4

2802.6

1764.7

AFT as a share of Total ODA inflows

54%

53%

67%

66%

Table 8.1 Aid for Trade to Caribbean countries, 2007–2011 (USD million) Source: Vinaye Ancharaz, 2013b

•

building productive capacity;

vices may be significant. The role that AFT can play here would particularly be in the area of co- financing with CC adaptation projects, especially where such initiatives have clear discernible trade impacts specifically linked to:

•

economic infrastructure;

•

trade policy and regulation,

•

trade policy and regulations and

•

economic infrastructure and

•

trade related adjustment.

•

productive capacity (Vinaye Ancharaz, 2013).

According to Nurse and Greene (2014), in the year 2007 most AFT funds in the Caribbean were allocated in terms of priority towards the broad areas of trade related development assistance for:

This appeared to be in line with the priorities identified by the various Caribbean governments in the areas of: •

Competitiveness, which was pinpointed as the top AFT priority area, with

•

trade policy analysis,

•

export diversification, and

•

regional integration (IDB and WTO, 2009).

With regard to the trade and development agenda observed above, potential linkages may be explored which facilitate complimentary initiatives with that of capacity building activities under CC mitigation and adaptation efforts, thus maximising results. In this regard the role of environmental goods and ser-

In this area, donor coordination observed via the ‚Grant Agreements‘ within the Pacific region may be viewed as a best practice upon which the CARIFORUM countries could adapt and follow for their own context. The signing of this agreement has lead to donor cooperation namely between Germany and the United States in the areas of climate change and the environment. The series of climate protection projects cover topics which address many issues relevant to the Caribbean region such as energy efficiency as well as nature conservation and adaptation to climate change, all under the broader goal of achieving sustainable development. The approach brings together several individual implementing actors on the ground within the

Climate Change (CC) & Innovation Governance

Climate Change IMPACTS

Aid for Trade

{

Trade Policy and Regulation

Economic Infrastructure

Productive Capacity

Economic Infrastructure

Productive Capacity

Damage to coastal infrastructure, port facilities, roads and distribution systems due to CC-induced extreme weather events.

Agriculture: Reduced agric. yield due to water stress, warmer temperatures, pests.

• Border tax adjustments

• Clean energy technologies

• ’Clean’ production technologies

• Strict ecolabeling

• Energy-efficient transportation

• Possible caps on GHG emissions

• Carbon footprint

• ’Greener’ buildings

• Limits to agricultural exploitation

• Food miles • Etc.

How increased greenhouse gas emissions affect trade (Indirect effects)

How Climate Change directly affects trade (Direct effects)

MITIGATION

Tourism: Erosion of beaches and coastal landscape damage to tourist facilities, etc.

How Climate Change directly affects trade (Direct effects)

ADAPTATION

Climate Change Diagram 8.1 A Schematic Presentation of the Linkages between Climate Change and Aid for Trade Source: Vinaye Ancharaz, 2013b

Pacific region. These actors can be national, regional or international in nature, representing either private sector or public sector issues. Such actors within the Pacific region‘s ‘Grant Agreements’ include the UNDP, USAID, GIZ, The Nature Conservancy and the Secretariat of the Pacific Community (Philipp Quitmann, 2014). Similarly to the Pacific context, several international actors are currently active within the CARIFORUM region, providing aid support in the areas of both trade policy and climate change funded projects. The German government is once again observed as a main donor in this regard, with at least three projects funded in the areas of climate change and the environment in the countries of Grenada, Guyana and St. Lucia respectively, as well as one project focused on trade policy based in Barbados. The table below outlines the potential partners with which an innovative governance agenda may be pursued by Caribbean government, by highlighting the relevant active projects where trade policy linkages can be found to the environment.

On-going Caribbean CC initiatives are identified in the table below, which demonstrate potentials for cooperation under trade and development cooperation activities. Also observed in the table below is the example of already existing overlaps between CC and trade related development within a project, in the case of the Dominican Republic. Another best practice which may be noted for the CARIFORUM region is the 2011 to 2015 Caribbean Regional Resilience Development Implementation Plan. This may be viewed as a regional example of the strategic attempt to acknowledge the overlaps which can exist between trade and CC oriented policy programmes. This particular project aimed to: •

Scale up the delivery of adaptation programmes in a range of key vulnerable sectors which were critical for the sustenance and expansion of livelihoods;

•

Support effective national, regional and international level climate architecture to deliver climate change/adaptation financing;

Climate Change (CC) & Innovation Governance

Relevant Donor Funded Projects in the Caribbean towards The areas of Trade and the Environment No

Donor

Project

Location

Germany (GIZ)

Caribbean E-car project Export/European Development Fund (EDF)

Barbados

European Union (EU)

11th EDF Programme, Regional Private Sector Development Programme (RPSDP)

Germany (GIZ)

Climate change adaptation project

EPA Barbados Implementation Support Project

Beneficiary

Timeframe

Opportunity Identified

CARIFORUM CARIFORUM states

2010 to Opportunities further explored in the area of 2014 environmental-friendly transport and renewable (possibility energy supply related to transport. for extension)

Barbados

2013 to 2014

Regional projects which helpachieve the priority of supporting the â&#x20AC;&#x153;fair andsustainable management of natural resourcesâ&#x20AC;? (CONCORD, 2013).

CARIFORUM CARIFORUM region states

2015 to 2020

Potential collaboration with the GIZ project on EPA implementation in Barbados, for an additional Component which provides supplemental support in the areas of economic goods and services. Partnerships explored and facilitated for training, knowledge and technology transfer activities with German companies, universities, ICT clusters and research institutes.

Grenada

2013 to 2017

Potential collaboration with the GIZ project on EPA implementation in Barbados, for an additional Component which explores the role of trade in environmental goods and services towards a sustainable energy agenda.

UNDP/ GEF and Caribbean Germany Renewable (CREDP and GIZ) Energy Development Programme

Grenada, Guyana and St. Lucia

The Bahamas, Ends in Barbados, Belize, 2016 Cuba, Dominica, Grenada, Guyana, Jamaica, St. Kitts & Nevis, St. Lucia, St. Vincent & The Grenadines, Suriname, Trinidad & Tobago

Available financing

European Commission

Caribbean Investment Facility

Barbados

CARIFORUM states

Launched in 2013

Collaborations which help turn climate challenges into economic opportunities; in the areas of solar energy, energy efficiency, water management, resource efficiency and agribusiness through financing, training, mentorship and other applicable services.

The Caribbean Climate Innovation Centre (CCIC)

Support to clean energy and climate technology ventures in the Caribbean

Trinidad & Tobago

CARIFORUM states

Launched in January, 2014

Table 8.2 Relevant Donor Funded Projects in the Caribbean towards the areas of Trade and the Environment Source: Elaboration of the author.

for CARIFORUM states

•

Climate Change (CC) & Innovation Governance

Achieve better resource mobilization for national adaptation priorities and develop a portfolio of bankable projects;

allocation processes and •

Sensitize national planning and finance ministries to integrate CC adaptation and risk management into their planning and resource

Improve fisheries and coral reef diversity, improve governance of coastal and marine resources, and to develop a public communications and marketing strategy.

Global Environment Facility (GEF) projects in the Caribbean Country

Project

Focal Area

GEF grant (USD m)

Co-financing (USD m)

Antigua and Barbuda

Developing a Strategic Approach to Sustainable Land Management

Land Degradation

0.2

1.3

Belize

Sustainable Development and Management of Biologically Diverse Coastal Resources

Biodiversity

3.0

0.9

Cuba

Mainstreaming and Sustaining Biodiversity Biodiversity Conservation in Three Productive Sectors of the Sabana Camaguey Ecosystem

4.1

23.4

Dominican Republic

Stimulating IndustrialCompetitiveness Through Biomass- based, Grid-connected Electricity Generation

1.3

7.5

Climate Change

Table 8.3 Global Environment Facility (GEF) projects in the Caribbean Source: Vinaye Ancharaz, 2013b

8.4. Important Factors for the Policy Making and Implementation Process

“benchmarks are necessary for reliable global monitoring of aid for trade efforts” (Nurse and Greene, 2014) 4.

In light of the above, the following question may be asked; how exactly can CC adaptation and mitigation measures be incorporated into AFT programmes? The role of research as well as the monitoring and evaluation mechanisms which support the data gathering and analysis process may prove significant here. Laura Williamson (2014) highlights the need for data collection, management and analysis towards guiding the policy decision making process, particularly as it relates to the fields of renewable energy and energy efficiency. Such a perspective falls in line with the principles of transparency and accountability observed under the global AFT framework towards good governance. In this regard, the OECD and WTO (2010) highlight the 2005 Paris Declaration on Aid Effectiveness which states that

To this end, the research work of organisations such as REN21 and the Worldwatch Institute may provide relevant existing best practices replicable for the Caribbean countries. Williamson (2014) especially links the need for reliable data towards facilitating policy design for mitigation and adaptation efforts pursued by governments. This may prove to be invaluable as well as necessary for guiding energy planning, adaptation and mitigation measures and for highlighting industry trends, opportunities as well as challenges via a comprehensive needs assessment of local conditions. Such mechanisms may also be integral for the on-going monitoring and reform of the

World Trade Organisation (WTO). Connecting to global markets, challenges and opportunities: case studies presented by WTO chairholders. Geneva Switzerland: WTO Chair Programme, 2014.

Climate Change (CC) & Innovation Governance

overall policy implementation process. Such results may additionally help to depict potential options for climate resilience projects, as well as provide comparisons for best fit programme design and planning. The GIZ’s results-based monitoring (RBM) model provides an example of such an approach which incorporates standardized international techniques for achieving accountability associated with AFT project implementation (Nurse and Greene, 2014). In this regard, the establishment of data collection mechanisms form an integral element of an evolving process which involves many actors. Williamson (2014) emphasizes the importance for data gathered to be reliable and validated via a collaborative process of information sharing between organizations. This is necessary in order to facilitate sound decision making which guides the policy making process. Additionally, the IPCC’s 2014 Small Island Developing States (SIDS) Assessment, makes mention of “risk profiles” which analyses critical social, economic and environmental issues that may be utilised to identify “adaptation-mitigation inter-linkages”, for example tourism infrastructure which is linked to coastal wetlands. The importance of conducting such an exercise of ‘risk profiling’ may prove particularly relevant for each Caribbean country, in an effort to ensure that accurate mitigation and adaptation measures are designed and implemented according to the respective local contexts. Such contextual analysis is significant due to the fact that “climate change impacts, vulnerability and adaptation will be variable from one island region to another” where the exercise of risk profiling may ensure adaptation to climate change may generate larger benefits to small islands, especially when delivered in conjunction with other development activities (IPCC, 2014). As such, the necessary data capture and analysis systems must be put in place to track and respond to climate change impacts as they occur. The World Watch Institute‘s work on global energy data collection in this area, may be viewed as a best practice for CARIFORUM countries. The additional work of knowledge networks such as REN21 and the ECREEE may further provide examples of best practi-

ces for reference based upon the West African region and the ECOWAS states‘ experience. As outlined earlier, the Caribbean region is a recipient of several AFT as well as CC funded initiatives. Currently AFT inflows are adequate to support the development agenda, with new and additional sources arising. To date, AFT flows have been even more substantial than Climate Change adaptation financing, with approximately 33.5 USD billion of AFT funds going to LDCs alone in the year 2011. Conversely, commitments towards climate adaptation were currently estimated to be less than 1 USD billion. Also significant to note in the policy process is the concept of climate change ‘loss’ and ‘damages’ to which countries cannot adapt. As stated by the IPCC’s 2014 SIDS Assessment, “addressing rising risks of damage and associated losses is important for SIDS where effects are disproportionate”. Such losses are referred to as “hard limits” in the PICC report, to which there are no known processes to change them. Examples of such may be observed in phenomenon such as loss of genetic diversity and the ability of Small island states, with limited resources, to adapt to the increasing impacts of sea level rise (IPCC, 2014). Consequently within the multilateral system such impacts should be thoroughly examined and the interests of SIDS such as the Caribbean states appropriately represented within the international context. According to Ancharaz (2013), the linkages between AFT and adaptation funding must be explicitly recognized by all stakeholders. In order to achieve sustainable development goals, partner countries such as the CARIFORUM states must start making claims for AFT in the form of co-financing climate adaptation projects. For effective harmonization between the two support areas, AFT must first be “mainstreamed” into CC adaptation programs, such as through National Adaptation Programmes of Action (NAPAs) or National Action Programmes (NAPs). Ancharaz (2013) also highlights that such possibilities for overlaps do currently exist, stating that “there is nothing in the AFT initiative which excludes it from financing CC adaptation projects”. These pro-

grammes need merely to clearly identify on-going projects with trade-related impacts, through which the scope of activities may be expanded via strategic partnerships. Where such harmonisation effectively occurs, efforts towards sustainable development may thus be enhanced. Cletus Springer (2013) in this regard, refers to the “Sustainable Competitiveness Model” seen graphically depicted below. According to Springer (2013), the above approach would entail a series of strategic actions which touch upon several areas in the ecological, economic and social spheres of Caribbean societies. Actions undertaken should stimulate and facilitate invest-

Climate Change (CC) & Innovation Governance

ment in environmentally-sound projects, as well as strengthen the backward and forward linkages existing between key sectors such as the travel and tourism industry and other parts of the wider economy. This approach allows stakeholders to play a role as active partners in regional initiatives. Support activities to this end should promote stronger interactions between major distributors with local and regional producers, while increasing and sustaining local participation in the overall planning, development and ownership under the innovation governance agenda.

Diagram 8.2 “Sustainable Competitiveness Model” Source: SolAbility, 2012

Sophie Sirtaine, World Bank Country Director for the Caribbean (2014) states that “Companies in the Caribbean have the skills and experience to innovate and find environmentally sound and profitable climate solutions the region needs.“ Ancharaz (2013) further points out that under such an approach AFT can be “whatever a country considers as trade-related”. As such, achieving synergies between the trade and climate change agenda in the short term may not necessarily need new governance mechanisms

but simply a new cooperative approach adopted by the already present implementing actors in the two areas. Such an ‘AFT-plus’ initiative could make both AFT and adaptation funds more effective, and help contribute globally to sustainable development objectives. Ultimately in the long term however, it is up to developing countries themselves such as the Caribbean states, to start demanding AFT to meet their trade-related adaptation priorities linked to climate change and environmental related issues.

Conclusion

According to the IPCC (2013), it is extremely likely that more than half of the observed increase in global average surface temperature from 1951 to 2010, was caused by the anthropogenic increase in greenhouse gas concentrations. With regard to this phenomenon, a link may be observed to sustainable development stemming from the fact that climate change is a constraint to development, making developing countries such as the CARIFORUM states vulnerable. However such countries lack the â&#x20AC;&#x153;adaptive capacityâ&#x20AC;? to take advantage of or cope with the consequences of such a phenomenon (Keith Nurse, 2007). Several challenges as well opportunities have been identified as it relates to climate change and its overlaps into the trade policy arena. The opportunities highlighted within this report, depicted great potential in several areas which may contribute towards the goal of sustainable development within the region via economic diversification within both the goods and services sectors. Current examples identified within this report include the case study of Barbados, examples of Antigua and Barbuda as well as St. Lucia. These island states have provided insight into the on-going economic prospects which have already begun to be explored

within the CARIFORUM region. Other international success stories mentioned, have additionally displayed the tangible monetary benefits experienced by countries such as the United Kingdom. Within the Caribbean context, much potential has been pinpointed particularly in the areas of sustainable energy, manufacturing, fisheries and aquaculture as well as eco-tourism. However as elaborated by Nurse (2013), a need still exists for policies which create an enabling environment to effectively realize such benefits under an innovation governance agenda. To this end, the region may need to be strategic in its approach to incorporating CC related issues into the current trade and development agenda, particularly where such initiatives have clear discernible trade impacts (Vinaye Ancharaz, 2013). If successful the CARIFORUM states may thus gain access to additional resources for its growth and development agenda, by tapping into additional financial resources for example under aid for trade allocations. Ultimately the goal is to maximize the opportunities available to the Caribbean region, while minimizing the risks and negative impacts which climate change has been demonstrated to already have had within the region.

Recommendations

10.1. Country Specific Economic Opportunities Identified and Pursued As mentioned in this report, a link may be observed between climate change and sustainable development which stems from the fact that climate change is a constraint to development. For small island developing states such as the CARIFORUM countries, this may create even more obstacles on their journey towards achieving sustainable development. Such countries are largely characterized by national account deficits, lacking the “adaptive capacity” to take advantage of, or cope with the consequences of such a phenomenon (Keith Nurse, 2007). As a result it is imperative for these nations to explore and pursue opportunities where they exist, by leveraging both internal and external resources available under climate change and trade policy initiatives. To this end, it may be in the best interest of the CARIFORUM states to explore projects targeted at the Tourism, Construction, Manufacturing, Fisheries and Energy sectors which: 1. Identify and outline in a short report the key areas not currently being supported which possess overlaps between the areas of trade policy, climate change and the environment within the CARIFORUM region which may hamper its sustainable development; 2. Identify the on-going climate adaptation, as well as trade development support projects within the CARIFORUM region which may help to address these areas via funding/ technical support based upon their current support activities; 3. Draft project proposals which pinpoint specific examples of how such projects may cooperate with each other, or be expanded to include elements addressing trade, climate change and the environment. Such proposals may outline support for specific economic opportunities in sectors of strength according to country, or those which demonstrate potential for growth thus contributing to sustainable development; 4. Conduct stakeholder consultations which include public-private dialogue (PPD), to bring key implementing actors together for discussions

on possible cooperation projects targeted at the trade and CC mitigation needs of the region. Specific regional project proposals should be presented and discussed at such meetings, to be pursued for funding with strategic national components involving local actors such as the Caribbean Climate Innovation Centre (CCIC) or other relevant business support organisations (BSOs) to ensure sustainability of initiatives.

10.2. Leveraging Other Available Resources The role of Aid for Trade (AFT) as a source of implementing policies developed is one which is mentioned within this report. In the short term, preliminary discussions with on-going AFT projects within the region may create a picture of possible projects which may be started with immediate project proposal submissions to relevant donor agencies for small scale support activities. This may include activities such as B2B initiatives, joint venture pilot projects, training exchanges and cooperation between universities for strategic R&D projects. Planning towards such short term collaborations may be initiated via a donor coordination meeting amongst the on-going CC and trade support projects in the CARIFORUM region. The output of such a donor meeting could identify clear areas for cooperation as well as draft proposals developed for specific cooperation activities to be followed up on based on stakeholder needs highlighted. For example several GIZ projects currently exist within the region between which several synergies may be identified, however little interaction currently occurs between the projects. Projects located in Grenada, Guyana and St. Lucia all focus on CC related topics while the Barbados Project focuses on trade related support under the EPA. Further collaboration opportunities may be explored with other partners such as under the upcoming 11th EDF RPSDP of which a priority area is the “fair and sustainable management of natural resources” (CONCORD, 2013). Proposals may be developed and submitted for support to implement specific national and regional projects where the two areas overlap e.g.

Recommendations

focused on the construction industry to foster sustainable building practices, associated to smart homes utilizing energy efficiency technologies etc.

10.3. An Appropriate CARIFORUM Policy Response The long term strategy for the region according to Nurse and Ancharaz (2013) respectively, should include an approach integrating innovation governance. The role of NAPAs and NAPs may be relevant in this regard. Innovation governance strategies developed should take into consideration the past, current and future implementation landscape of the Caribbean region in the areas of both trade related as well as CC support. In order to effectively maximize the available internal and external resources at hand, a collaborative approach leveraging existing technical assistance of on-going projects may prove critical. The encouraged donor coordination and cooperation programmes drafted may help to ensure that both trade and CC related development elements are incorporated in a harmonious manner in any strategy developed.

The role of NAPAs and NAPs here would additionally help to guide the implementation process, while taking into consideration local circumstances. These action plans may further pinpoint key cooperation partners and their roles within strategic areas of an innovation governance agenda for example knowledge and technology transfer, innovation stimulation via R&D, joint venture projects and the formation of regional think tanks as well as professional networks. In terms of leveraging economic benefits under the CC agenda, long term market contact points should also be established which formally connect business clusters together in specific areas with that of other leading international markets such as Germany. Such contact points should target key development needs significant for the sustainable growth of CARIFORUM states which facilitate the enhanced competitiveness of SMEs, for example renewable energy and energy efficiency.

References

eferences

Ancharaz, Vinaye. “Trade and CC/Environmental Linkages: Perspectives from theory, law and negotiations.” Port of Spain, Trinidad: ICTSD, 2013. Ancharaz, Vinaye. “Complementing Climate Change Funds with an AFT-plus Initiative: A Caribbean Perspective.” Trade Policy, Climate Change and Environmental Sustainability (TPCCES). Geneva, Switzerland: The International Centre for Trade and Sustainable Development (ICTSD), 2013. Barton, Christopher. Inter-American Development Bank, Caribbean Development Trends. 2014. http:// blogs.iadb.org/caribbean-dev-trends/2013/11/14/ the-caribbean-has-some-of-the-worlds-highestenergy-costs-now-is-the-time-to-transform-theregions-energy-market/ (accessed March 2014). Caribbean Export Development Agency. CARIFORUM Manufacturing Firms Participate in European Study Tour. Press Release, Caribbean Export Development Agency, 2012. Caribbean Hotel and TourismAssociation. Travel and Tourism‘s Economic Impact. Oxford: World Travel & Tourism Council, 2011. CARICOM Secretariat. Trade Policy Review: Trinidad & Tobago. WT/TPR/S/151, Geneva: World Trade Organisation, 1996. CARICOM Secretariat. Trade Policy Review: Trinidad & Tobago. WT/TPR/S/151/Rev. 1, Geneva: World Trade Organisation, 2005. Chaitoo, Ramesh. Trade, Development and Financial Services Issues in CARICOM. St. Augustine: The University of the West Indies, 2006. Confederation Europeanne des ONG d‘urgence et de developpment (CONCORD). The 11th European Development Fund. CONCORD Cotonou Working Group Briefing Paper. ACP-EU Joint Parliamentary Assembly: Brussels, 2013. ECLAC. The Development of Services in the Caribbean. LC/CAR/G.717, ECLAC, The Caribbean Development and Coopration Committee, January, 2003. FAO. Fisheries and Aquaculture in Latin America and the Caribbean: Situation and Outlook in 1996. FAO Fisheries Circular No. 921 FIPP/C921, Fisheries Department, Rome, Italy: Food and Agriculture

Organization of the United Nations, 1996. FAO. “Regional Consultation on Policy and Programmatic Actions to Address High Food Prices in the Caribbean.” Port-of-Spain: FAO, Sub-Regional Office for the Caribbean, Barbados, 2011. FAO. Unasylva: Adapting to Climate Change. Vol. 60 231/232. FAO, 2009. Hart, Selwin. Caribbean Community Climate Change Centre. Speech presented at the Caribbean Launch: The United Nations Intergovernmental Panel on Climate Change (IPCC) Fifth Assessment Report (AR5), October 2014. ICLEI. Renewable energy leads to costs savings. REN 21 Renewable Energy Policy Network, Europe: International Council for Local Environmental Initiatives, 2009. ICTSD. International Transport, Climate Change and Trade: What are the Options for Regulating Emissions from Aviation and Shipping and what will be their Impact on Trade?. ICTSD, 2010. International Monetary Fund. Trinidad & Toabgo Staff Report for the 2013 Article IV Consultation. IMF Country Report No. 13/306, Washington: International Monetary Fund, 2013. Intergovernmental Panel on Climate Change (IPCC). Climate Change 2013: The Physical Science Basis. Cambridge: Cambridge University Press, 2013. Intergovernmental Panel on Climate Change (IPCC). The IPCC’s Fifth Assessment Report: What’s in it for Small Island Developing States?. Overseas Development Institute and Climate & Development Knowledge Network, 2014 Keane, Jodie. “Trade in Environmental Goods and Services: Unlocking Potential in the Caribbean.” Trade Policy, Climate Change and Environmental Sustainability. Port of Spain: Overseas Development Institute (ODI), 2013. Laryea, Joellen. Caribbean Export Development Agency. “Government of the Republic of Trinidad & Tobago.” news.gov.tt. April 2014. http://www.news. gov.tt/content/caribbean-export-hosts-3rd-caribbean-conference-international-financial-services#. Uzw__YXLIe4 (accessed April 2014).

References

Leslie, Kenrick. Caribbean Community Climate Change Centre. Speech presented at the Caribbean Launch: The United Nations Intergovernmental Panel on Climate Change (IPCC) Fifth Assessment Report (AR5), October 2014.

Springer, Cletus. “Trade and Environment Sustainability: The Case of Travel and Tourism in the Caribbean.“ Trade Policy, Climate Change and Environmental Sustainability (TPCCES). Port of Spain, Trinindad: Organization of American States (OAS), 2013.

Monkelbaan, Joachim. “Aviation and Shipping, Climate Change and Trade: Still Up in the Air?” Trade Policy, Climate Change and Environmental Sustainability . Port of Spain: ICTSD, 2013.

The Network of Heads of European Environment Protection Agencies. The Contribution of Good Environmental Regulation to Competitiveness. The Network of Heads of European Environment Protection Agencies, 2005.

Monkelbaan, Joachim. “Environmental Goods in the Caribbean: Trade Profile and Implications for Trade Negotiations.” Trade Policy, Climate Change and Environmental Sustainability (TPCCES). Port of Spain, Trinidad: ICTSD, 2013.

Universitat Pompeu Fabra. CARIFORUM-EU Exportable Sectors and Business Opportunities Study. EU- ACP Partnership Programme, PROINVEST. AIRD, 2014.

Monkelbaan, Joachim. “Sustainable Energy Services in the Caribben Region.” Trade Policy, Climate Change and Environmental Sustainability. Port of Spain: ICTSD, 2013.

Williamson, Laura. “Closing the Data Gap: Driving Good Decision Making”. Best Practices in Gathering and Using Energy Data for LEDS Development. Washington, United States: REN21, 2014.

Nexant. Caribbean Regional Electricity Generation, Interconnection and Fuel Supply Strategy. World Bank, 2010.

World DataBank. World Tourism Organization, Yearbook of Tourism Statistics, Compendium of Tourism Statistics and data files. The World Bank Group, 2015.

Nurse, Keith. “Climate Change, Trade Policy and Innovation Governance: The Caribbean Context.” Trade Policy, Climate Change and Environmental Sustainability (TPCCES). Port of Spain, Trinidad: UWI Consulting, 2013.

World Bank Group. “New Center will promote green business and Reduce Climate Risks in the Caribbean.” The World Bank. January 27, 2014. http://www.worldbank.org/en/news/press- release/2014/01/27/green-business-reduce-climaterisks-caribbean (accessed April 2014).

Nurse, Keith. Science, Technology and Innovation in the Caribbean. Santiago, Chile: UNECLAC, 2007. Overseas Development Institute (ODI). “How to Stay Ahead in a Low Carbon Global Economy.” MakingitMagazine. April 2014. http://www.makingitmagazine. net/?p=8126 (accessed May 2014). OECD/IEA. International Energy Agency, Climate Change. March 2014. http://www.iea.org/topics/climatechange/ (accessed March 2014). Partridge, Glyn, interview by Ginelle Greene. GIZ EPA Implementation Support Project‘s: Success Story Impact Assessment Barbados: Deutsche Gesellschaft für Internationale Zusammernarbeit (GIZ), (April2014). Quitmann, Philipp. GIZ receives USAID contract for Climate Protection Projects in the Pacific Island Region. Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), 2014.

World Trade Organisation (WTO). Connecting to global markets, challenges and opportunities: case studies presented by WTO chairholders. Geneva Switzerland: WTO Chair Programme, 2014. World Travel & Tourism Council. Travel and Tourism Economic Impact 2012. European Union: World Travel & Tourism Council, 2012.

List of Figures and Tables

ist of Figures and Tables

Figures Diagram 3.1: Increasing Global trend of CO2 levels from the 1950 to 2010 period Source: IPCC, 2013: Summary for Policymakers. In: Climate Change 2013: The Physical Science Basis. Contribution of Working Group I to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change [Stocker, T.F., D. Qin, G.-K. Plattner, M. Tignor, S.K. Allen, J. Boschung, A. Nauels, Y. Xia, V. Bex and P.M. Midgley (eds.)]. Cambridge University Press, Cambridge, United Kingdom and New York, NY, USA, pp. 1–30, doi:10.1017/CBO9781107415324.004. Diagram 3.2: Total anthropogenic CO2 emissions from 1870 Source: IPCC, 2013: Summary for Policymakers. In: Climate Change 2013: The Physical Science Basis. Contribution of Working Group I to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change [Stocker, T.F., D. Qin, G.-K. Plattner, M. Tignor, S.K. Allen, J. Boschung, A. Nauels, Y. Xia, V. Bex and P.M. Midgley (eds.)]. Cambridge University Press, Cambridge, United Kingdom and New York, NY, USA, pp. 1–30, doi:10.1017/CBO9781107415324.004.

Diagram 4.1: Long-Haul Travel and Destinations: Barbados, Mauritius & Fiji (share of long-haul in total arrivals) Source: Keith Nurse, Keron Niles, Denyse Dookie, “Climate Change Policies and Tourism Competitiveness in Small Island Developing States.” NCCR Swiss Climate Research Conference on the International Dimensions of Climate Policies 21-23 January 2009, University of Bern, Bern, Switzerland. Available at: http://www.nccrclimate.unibe.ch/conferences/climate_policies/working_papers/Nurse.pdf Diagram 4.2: Change in ocean surface pH during the periods of 1986 to 2005 and 2081 to 2100 Source: IPCC, 2013: Summary for Policymakers. In: Climate Change 2013: The Physical Science Basis. Contribution of Working Group I to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change [Stocker, T.F., D. Qin, G.-K. Plattner, M. Tignor, S.K. Allen, J. Boschung, A. Nauels, Y. Xia, V. Bex and P.M. Midgley (eds.)]. Cambridge University Press, Cambridge, United Kingdom and New York, NY, USA, pp. 1–30, doi:10.1017/CBO9781107415324.004. Diagram 4.3: Carbon Dioxide Emissions per capita in the year 2000 Source: FAO. Unasylva: Adapting to Climate Change. Vol. 60 231/232. FAO, 2009.

Diagram 3.3: Average global increase in temperature over the periods of 1986 to 2005 and 2081 to 2100. Source: IPCC, 2013: Summary for Policymakers. In: Climate Change 2013: The Physical Science Basis. Contribution of Working Group I to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change [Stocker, T.F., D. Qin, G.-K. Plattner, M. Tignor, S.K. Allen, J. Boschung, A. Nauels, Y. Xia, V. Bex and P.M. Midgley (eds.)]. Cambridge University Press, Cambridge, United Kingdom and New York, NY, USA, pp. 1–30, doi:10.1017/CBO9781107415324.004.

Diagram 4.4: Economic Impact of Maritime Transport (US$30 tonne CO2) Source: ICTSD (2010) International Transport, Trade and Climate Change, Information Note Number 17. October 2010 as visited at http://ictsd.org/ on 20th April, 2012.

Diagram 3.4: Average global increase in precipitation over the periods of 1986 to 2005 and 2081 to 2100. Source: IPCC, 2013: Summary for Policymakers. In: Climate Change 2013: The Physical Science Basis. Contribution of Working Group I to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change [Stocker, T.F., D. Qin, G.-K. Plattner, M. Tignor, S.K. Allen, J. Boschung, A. Nauels, Y. Xia, V. Bex and P.M. Midgley (eds.)]. Cambridge University Press, Cambridge, United Kingdom and New York, NY, USA, pp. 1–30, doi:10.1017/CBO9781107415324.004.

Diagram 5.1: Linkages between Trade Policy & Climate Change Source: Nurse, Keith. “Climate Change, Trade Policy and Innovation Governance: The Caribbean Context.” Trade Policy, Climate Change and Environmental Sustainability (TPCCES). Port of Spain, Trinidad: UWI Consulting, 2013.

Diagram 4.5: International Tourism as a % of GDP, 2009 to 2012 period Source: World DataBank. World Tourism Organization, Yearbook of Tourism Statistics, Compendium of Tourism Statistics and data files. The World Bank Group, 2015.

Diagram 7.1: Export of EGs as a Percentage of Total Exports (2011 or nearest year)

List of Figures and Tables

Source: Keane, Jodie. “Trade in Environmental Goods and Services: Unlocking Potential in the Caribbean.” Trade Policy, Climate Change and Environmental Sustainability. Port of Spain: Overseas Development Institute (ODI), 2013. Diagram 7.2: Possible linkages between trade policy on the competitiveness of SMEs in the renewable energy sector Source: Nurse, Keith. “Climate Change, Trade Policy and Innovation Governance: The Caribbean Context.” Trade Policy, Climate Change and Environmental Sustainability (TPCCES). Port of Spain, Trinidad: UWI Consulting, 2013. Diagram 8.1: A Schematic Presentation of the Linkages between Climate Change and Aid for Trade Source: Ancharaz, Vinaye. “Complementing Climate Change Funds with an AFT-plus Initiative: A Caribbean Perspective.” Trade Policy, Climate Change and Environmental Sustainability (TPCCES). Geneva, Switzerland: The International Centre for Trade and Sustainable Development (ICTSD), 2013 Diagram 8.2: “Sustainable Competitiveness Model” Source: SolAbility. The Global Sustainable Competitiveness Index. SolAbility, 2012.

Tables Table 4.1: The Tourism Industry’s 2011 Global Visitor Exports Source: World Travel & Tourism Council. Travel and Tourism Economic Impact 2012. European Union: World Travel & Tourism Council, 2012. Table 4.2: Global Travel and Tourism’s Direct Contribution to GDP, 2011 Source: World Travel & Tourism Council. Travel and Tourism Economic Impact 2012. European Union: World Travel & Tourism Council, 2012. Table 4.3: Cost of Inaction in the Caribbean by the year 2100 Source: Ramón Bueno, Cornelia Herzfeld, Elizabeth A. Stanton, and Frank Ackerman. The Caribbean and Climate Change: The Costs of Inaction. Tufts University, May 2008. Available at http://ase.tufts.edu/gdae/Pubs/ rp/Caribbean-full-Eng.pdf. Table 6.1: Key Relevant WTO Provisions on the Environment Source: Ancharaz, Vinaye. “Trade and CC/Environmental Linkages: Perspectives from theory, law and negotiations.” Port of Spain, Trinidad: ICTSD, 2013.

Table 7.1: Examples of Types of EGs Exported Source: Keane, Jodie. “Trade in Environmental Goods and Services: Unlocking Potential in the Caribbean.” Trade Policy, Climate Change and Environmental Sustainability. Port of Spain: Overseas Development Institute (ODI), 2013. Table 7.2: Top Exporters and Export Values 2010-2012 (USD Millions) Source: Monkelbaan, Joachim. “Environmental Goods in the Caribbean: Trade Profile and Implications for Trade Negotiations.” Trade Policy, Climate Change and Environmental Sustainability (TPCCES). Port of Spain, Trinidad: ICTSD, 2013. Table 7.3: Caribbean imports of HS RE products, based on export data reported by trading partners (USD Millions) Source: Monkelbaan, Joachim. “Sustainable Energy Services in the Caribben Region.” Trade Policy, Climate Change and Environmental Sustainability. Port of Spain: ICTSD, 2013. Table 7.4: The Case of Barbados Source: Nurse, Keith. “Climate Change, Trade Policy and Innovation Governance: The Caribbean Context.” Trade Policy, Climate Change and Environmental Sustainability (TPCCES). Port of Spain, Trinidad: UWI Consulting, 2013. Table 8.1: Aid for Trade to Caribbean countries, 2007–2011 (USD million) Source: Ancharaz, Vinaye. “Complementing Climate Change Funds with an AFT-plus Initiative: A Caribbean Perspective.” Trade Policy, Climate Change and Environmental Sustainability (TPCCES). Geneva, Switzerland: The International Centre for Trade and Sustainable Development (ICTSD), 2013 Table 8.2: Relevant Donor Funded Projects in the Caribbean towards The areas of Trade and the Environmen Source: Elaboration of the author. Table 8.3: Global Environment Facility (GEF) projects in the Caribbean Source: Ancharaz, Vinaye. “Complementing Climate Change Funds with an AFT-plus Initiative: A Caribbean Perspective.” Trade Policy, Climate Change and Environmental Sustainability (TPCCES). Geneva, Switzerland: The International Centre for Trade and Sustainable Development (ICTSD), 2013.

Published by Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH EPA Implementation Support Project, Barbados Office Registered offices Bonn and Eschborn, Germany Friedrich-Ebert-Allee 40 53113 Bonn, Germany Tel. + 49 228 44 60-0 Fax +49 228 44 60-17 66

Dag-Hammarskjöld-Weg 1-5 65760 Eschborn, Germany Tel. + 49 61 96 79-0 Fax +49 61 96 79-11 15

E-Mail: info@giz.de Internet: www.giz.de Authors Ginelle Greene, GIZ and Dr. Keith Nurse, UWI Consulting Inc. With special thanks to funding partner the WTO Chair Programme Design and Layout Vielhaber & Geilen Partnerschaft, Bonn Photo credits cover and page 4: © GIZ/Siegmund Thies page 6: © GIZ/Ursula Meissner page 7: © GIZ/Florian Kopp page 11: © GIZ/Michael Netzhammer page 17: © GIZ/Dirk Ostermeier page 23: © GIZ/Peter Korneffel page 28: © GIZ/Dirk Ostermeier page 37: © GIZ/Christof Kersting page 39: © GIZ/Peter Korneffel As at March 2015 GIZ is responsible for the content of this publication. On behalf of Federal Ministry for Economic Cooperation and Development (BMZ), Division Trade, Globalization, Investment Addresses of the BMZ offices BMZ Bonn Dahlmannstraße 4 53113 Bonn, Germany Tel. + 49 228 99 535 - 0 Fax + 49 228 99 535 - 3500 poststelle@bmz.bund.de www.bmz.de

BMZ Berlin Stresemannstraße 94 10963 Berlin, Germany Tel. +49 30 18 535 - 0 Fax +49 30 18 535 - 2501