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Current Developments in Domestic Climate Mitigation Measures Carbon footprinting and energy efficiency labelling schemes and relevant WTO rules and activities Ludivine Tamiotti, Counsellor Trade and Environment Division, WTO [email protected] Outline of presentation Relevant Activities of the WTO Relevant WTO rules Carbon footprinting and energy efficiency discussions in the WTO Relevant Activities of the WTO WTO/UNEP Report on Trade and Climate Change Economic incentives Regulatory instrument Key objectives Key policy instruments Internalize environmental costs Carbon tax, emissions trading schemes Promote development & deployment of climatefriendly technologies Financial mechanisms: R&D, fiscal, price and investment measures Improve energy efficiency and reduce GHG emissions Emissions and energy performance standards and labelling WTO/UNEP Report on Trade and Climate Change Key objectives Key policy instruments Key WTO Agreement Internalize environmental costs Carbon tax, emissions trading schemes GATT Promote development & deployment of climatefriendly technologies Financial Mechanisms: R&D, fiscal, price and investment measures SCM Agreement Improve energy efficiency and reduce GHG emissions Emissions standards, labelling on energy performance TBT Agreement WTO Specialized Committees A negotiating forum The core functions of the WTO may have a place in the trade and climate change debate: Specialized committees The administration of a set of rules WTO Specialized Committees 2 WTO Committees are directly relevant to issues related to Carbon footprinting and energy efficiency Committee on Trade and Environment (CTE) Committee on Technical Barriers to Trade (TBT Committee) WTO Specialized Committees Committee on Trade and Environment (CTE) General discussions of the environmental benefits of removing restrictions in the energy sector, the forestry sector, the effect of energy efficiency labelling on market access Specialized discussions on Carbon Footprinting in 2010: exchange of national experiences, briefings by international institutions WTO Specialized Committees Committee Technical Barriers to Trade (CTBT) In recent years the TBT Committee discussed a number of product standards and labelling requirements targeted to energy efficiency or emission control Fuel economy standards for cars Examples of regulations discussed so far include: Eco-design requirements for energyusing products Energy efficiency programmes for consumer products Emission limit values for diesel engines Relevant WTO Rules Philosophy of the TBT Agreement Right to Take Regulatory Measures Avoid Unnecessary Obstacles to Trade Key principles Agreement on Technical Barriers to Trade / GATT Non discrimination Key principles include Avoidance of unnecessary trade barrier Harmonization Non-Discrimination Treatment no Less Favourable to Like Products Originating Of national origin National Treatment From any other country Most-Favoured Nation (MFN) Philosophy of the TBT Agreement Stated Preference for International Standards International Conformity Assessment Procedures Avoid unnecessary obstacles to trade National security requirements Article 2.2 Protection of human health or safety Legitimate objectives Protection of animal or plant life or health Article 5.1.2 Protection of the environment Prevention of deceptive practices …Inter alia… Carbon footprinting and energy efficiency discussions in the WTO Global Proliferation of PCF – Key Examples of National Schemes All follow ISO lifecycle analysis principles and harmonizing with ISO 14067, but with specified methodologies (and labels) • UK – PAS 2050 – – Carbon Trust, Carbon Reduction Label Becoming a world standard • • used by companies in United States, China, Korea, Australia, etc Japan – TS Q0010 – – – • Reliance on PCR July 2010 revision following road testing Pilot project 2009-2011 France – BP X30-323 – – – Multi-criteria, Mandatory? Road testing starting 1 July 2011 Multiple labelling formats will be tested by firms in 2011 trials Other Emerging Government Schemes • Korea – Korea Carbon Footprint Label • New Zealand – National GHG Strategy for agricultural exports • Chile – wine, agricultural goods • Thailand – Carbon Reduction Label and Carbon Footprint Label • Chinese Taipei – Carbon Label • Singapore – Singapore Carbon Label • China – carbon footprint label on sea scallops 24 October 2010 Concerns expressed in the CTE Lack of transparency Cost of conformity assessment Lack of harmonization Harmonization is underway on methodology (for government schemes), but labels and communication of claims of vary greatly Concerns expressed in the CTE Market access impacts of the proliferation of private standards Non-neutrality of CFP methodologies Confusion of consumers created by multiple labelling schemes Key Characteristics of Emissions/ energy efficiency standards Emissions/ energy efficiency standards and regulations can be… Based on design Based on performance Best used when few options for controlling emissions Prevalent to improve energy efficiency in appliances and buildings more flexibility Japan’s Top Runner Program (the energy performance of the most efficient model (e.g. household appliances) on the market is used to set a target for all manufacturers. Key Characteristics of Emissions/ energy efficiency standards Emissions/ energy efficiency standards and regulations can be… Based on design Based on performance Defining products Defining processes Mainly address energy efficiency & emissions related to the use of the product May result in direct environmental outcomes, as they improve energy efficiency or limit emissions to a certain level during production Key Characteristics of Emissions/ energy efficiency standards Emissions/ energy efficiency standards and regulations can be… Based on design Based on performance Defining products Defining processes Mandatory Voluntary Minimum Energy Performance Standards (MEPS) for appliances (Australia) ENERGY STAR (United States) Key Characteristics of Emissions/ energy efficiency standards Emissions/ energy efficiency standards and regulations can be… Based on design Based on performance Defining products Defining processes Mandatory Voluntary Public Private Minimum energy-efficiency performance standards for major domestic appliances (Canada) Leadership in Energy and Environmental Design (LEED) in the building sector (United States) Key compliance tools: Labelling Most OECD countries (energy-efficiency labelling) Scope Many non OECD countries, e.g. South Africa, Argentina, Sri Lanka and Tunisia Also examples of voluntary energy labelling programmes for household appliances (E.g. Thailand, Hong Kong, China, India, Brazil) Key compliance tools: Labelling Most OECD countries (energy-efficiency labelling) Scope Many non OECD countries, e.g. South Africa, Argentina, Sri Lanka and Tunisia Product’s energy performance/emissions levels while in operation Information covered e.g. EU, Australia, Canada and US require energyefficiency labels for several household appliances Product’s entire life-cycle, including its energy efficiency e.g. Nordic Swan, German Blue Angel and the EU’s eco-label Flower The issue of food miles Key compliance tools: Labelling Comparative labels compare performance among similar models Type of instrument e.g. for household appliances in Australia, EU, Canada, US, Brazil, Tunisia, China, Thailand and Korea Endorsement labels Seals of approval assuring consumers that a product meets certain criteria e.g. Energy Star label (US), Brazil, Thailand and China (Certificate for Energy Conservation Product) Key compliance tools: Conformity assessment to determine whether the requirements in standards & regulations are fulfilled Objectives give consumers confidence in the integrity of products add value to manufacturers’ marketing claims Key compliance tools: Conformity assessment Testing Ex post efficiency testing on labelled appliances (Electricity Generating Authority of Thailand) Inspection Type of instrument In the building sector, the Leadership in Energy and Environmental Design (LEED) (US) Certification Mark that energy performance of regulated energyusing products has been verified (Canada) Accreditation Metrology Environmental effectiveness Increase in energy efficiency of products, e.g. electrical equipment Measurement tools In California, the energy use of refrigerators in 2000 was more than two-thirds lower than in 1974 (energy-efficiency standards are in place and regularly updated since the late 1970s) Behavioural changes of consumers and manufacturers In the United States, recognition of the Energy Guide label was found to be quite good; however understanding was limited, with respondents unable to determine which appliance was more energy-efficient, based on the labels Current Developments in Domestic Climate Mitigation Measures Carbon footprinting and energy efficiency labelling schemes and relevant WTO rules and activities Ludivine Tamiotti, Counsellor Trade and Environment Division, WTO [email protected]