Trade and Investment in Environmental Goods

The case of Renewable Energy Technologies and South-South Trade

Anja von Moltke

Head, Trade, Policy and Planning Unit

UNEP Economy and Trade Branch

Trade–Related SDGs

Goal 1 End poverty in all its forms everywhere

Goal 2 End hunger, achieve food security and improved nutrition and promote sustainable agriculture

2.b: Correct and prevent trade restrictions and distortions in world agricultural markets… in accordance with the mandate of the Doha Development Round.

Goal 3 Ensure healthy lives and promote well-being for all at all ages Goal 4 Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all Goal 5 Achieve gender equality and empower all women and girls Goal 6 Ensure availability and sustainable management of water and sanitation for all Goal 7 Ensure access to affordable, reliable, sustainable and modern energy for all Goal 8 Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all

8.a: Increase Aid for Trade support for developing countries, particularly LDCs, including through the Enhanced Integrated Framework for LDCs.

Goal 9 Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation

Goal 10 Reduce inequality within and among countries Goal 11 Make cities and human settlements inclusive, safe, resilient and sustainable Goal 12 Ensure sustainable consumption and production patterns Goal 13 Take urgent action to combat climate change and its impacts Goal 14 Conserve and sustainably use the oceans, seas and marine resources for sustainable development

Goal 15 Protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage forests, combat desertification, and halt and reverse land degradation and halt biodiversity loss

Goal 16 Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels

Goal 17 Strengthen the means of implementation and revitalize the global partnership for sustainable development

17.10: Promote a universal, rules-based, open, non-discriminatory and equitable multilateral trading system under the WTO including through the conclusion of negotiations within its Doha Development Agenda

17.11: Increase significantly the exports of developing countries, in particular with a view to doubling the LDC share of global exports by 2020.

17.12: Realize timely implementation of duty-free, quota-free market access on a lasting basis for all least developed countries consistent with WTO decisions…

Indirectly related to trade Directly related to trade Explicit mention of trade

Shifting global context of international trade

Population Growth 7 billion consuming and producing on the

planet – soon another 3 billion

Integration Unprecedented increase in global integration and global value chains due to technological advance, reduction of tariffs, and capital mobility

Fragmentation Increasing fragmentation of trade and investment

Environmental challenges Increasing environmental challenges (climate

change, air pollution, heath, natural resource extraction) also with trade impacts

- Green economy trade opportunities in six sectors in developing countries

- How trade-related challenges can be addressed sustainably

- How to develop national capacity for the transition to a green economy

-> Trade in EGS is expected to grow to US$1.9 trillion by 2020 .

Green Economy Trade Opportunities Project

South-South Trade Report

Developing countries have have become net

exporters of renewable energy goods

Source: UN Comtrade data, UNEP analysis

Developing countries’ Balance of Trade in Selected RE Products,

2004-2012 (US$ millions)

South-South trade makes up a large portion of

some sectors of global RE trade

Source: UN Comtrade data, UNEP analysis

South-South Trade as a Share of Global Trade by Sector

2004-2012 (%)

Asian developing countries are the largest

players in South-South trade

Source: UN Comtrade data, UNEP analysis

Participation of China and Other Countries in South-South exports

2008-2012 (%)

A Number of Countries are Emerging as

Increasingly Significant Importers of Solar PV

Source: UN Comtrade data, UNEP analysis

Solar PV Cells and Modules Exported to Developing Country

Markets

2009-2012 (US$ millions, % of total)

• GE-TOP Ghana: Assess opportunities for solar

energy exports to West African Power Pool region

• Considerable solar electricity generation potential:

– Generate up to 167,200 GWh of solar electricity

annually with an installed capacity of 106 GWp

South-South Trade in Practice –

GE-TOP Ghana

Source: Frankfurt School-UNEP Centre/BNEF. 2015. Global Trends in Renewable Energy Investment 2015

Developing countries increasingly drive RE markets

US$ 131 billion invested in RE in 2014

Investment in RE - global trends

• Global investment in clean energy rose 17% in 2014

to US$270 billion

• RE investment overall increased by six times since

2004

•Global fossil fuel subsidies: USD 300 billion 2007, USD 544 in 2012; six times more than subsidies to renewables

•Phasing out global fossil fuel subsidies by 2020 could

•Reduce global primary energy demand by 5 %

•Reduce energy-related CO2 emissions by 5.8 %

Source: Frankfurt School-UNEP Centre/BNEF. 2015. Global Trends in Renewable Energy Investment 2015

Three golden rules to mobilizing finance

• Create a level playing field

• Allow for easy market access

• Mitigate the investment risk (politically, regulatory)

How to stimulate Finance and Investment in

Renewable Energy Financing

Trade in EGS can create new opportunities

Access to affordable environmental goods, creation of services

Integration into GVC and growth in green industries

Regional production, trade and investment in EGS.

Climate Change Mitigation, Adaptation and Resource

Efficiency

.

Powerful signal

EGA can be a powerful signal to

setting and implementing the

post 2015 agenda and to climate

summit.

If … :

- Environmental credibility

- Future extension

- Inclusiveness

- Capacity building

Thank you!

anja.moltke@unep.org