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T H E T R A D E A N D C L I MATE CH AN G E N EX US
Hence, the challenge is how to ensure that poor countries’ interests are reflected in the development of carbon-accounting standards and methodologies and that the realities of their conditions are reflected in the databases used in emissions reduction initiatives. There is a general lack of knowledge of how low-income-country value chains perform in terms of carbon emissions and how poor countries will fit into future value chains under business carbon management. Low-income countries need to understand their “carbon competitiveness” in key exports, including the pattern of their emissions compared with those of other countries, and the ability of their producers to benefit from “carbon efficiencies,” through instruments such as sustainability criteria, standards, and certification. Further research on this emerging policy issue is required. This effort needs to be combined with the much richer literature on standards and low-income-country exports to address the question of how climate-friendly global value chains can also be turned into inclusive global value chains.
Greening transport: Implications for low-income-country exports Climate change mitigation includes a series of measures that are likely to increase the transport costs of traded goods, including the exports of low- and middle-income countries. There is a popular perception that the emissions from international transport are a hotspot in supply chains and that they should be reduced as much as possible. To this end, exports from countries that use carbon-intensive transport modes and are located far from global markets could be penalized—for example, by limiting the transporting of fresh produce exports to market by air or tourism in remote low-income countries. Two key questions arise in this context: (1) Will low- and middle-income countries be able to exploit new, more carbon-efficient transport modes? and (2) If, and how, will low-income countries be exempted from policy measures that affect the transporting of traded goods? On the plus side, mitigation may also open new export markets, exemplified by the opportunity for low- and middle-income countries to start producing and supplying zero-emission fuels (Englert and Losos 2020). This section briefly reviews the evidence on how transportation costs affect the volume and structure of exports and how mitigation measures might affect costs. It also looks at the export structure of low-income countries and how emissions are distributed in the global supply chains of which low-income countries are a part. This discussion should lead to a better understanding of how vulnerable poor countries are to increased transport costs caused by mitigation. While the discussion focuses on air and sea transport, several low- and middle-income countries are investing heavily in rail transport, which can be both more cost-effective and less emissive than road transport. Sea transport costs may be affected by mitigation measures. Both the International Maritime Organization (IMO) and individual firms have been active in developing mitigation measures. In April 2018, the IMO committed to reducing the 2008 levels of emissions in the shipping sector by 50 percent by 2050. Some firms have set higher targets: the world’s biggest container shipper, Maersk, aims to be carbon-neutral by 2050. Shipping companies also work collectively outside of the IMO. Maersk has pledged to work with industry players like ABS, Cargill, MAN, Mitsubishi, and Siemens to establish a research center of 100 scientists to support a reduction in carbon emissions from shipping.
