Thread by @TennantReed

One theme at #COP28 is pushback by big developing countries on “unilateral trade measures” related to climate see Brazil here). That appears to mean not just EU #CBAM but US solar tariffs, rumblings about GASSA, & maybe green industrial policy overall.
But it’s a weird debate!

One of the antI-UTM protagonists is BASIC (Brazil South Africa India China). But India is vigorously building up its solar PV sector to shut out China, for similar reasons to the US!

Developed countries are firmly pushing back on the anti-UCM theme, albeit with a combo of Fat Tony-esque “what’s a unilateralism?” and pointing at the WTO as the right place to discuss this.

Brazil said “but we raised this at WTO and the same Parties said ‘not here, go to UNFCCC’”, & China pointed to Article 3.5 of the UNFCCC which is quite clear on what unilateral trade measures are.

But the 3.5 language just copies GATT/WTO language. And developed economies, especially EU, can and do strongly argue (elsewhere) that their measures are not arbitrarily or unjustifiably discriminatory nor a disguised restraint on trade.

EU in particular has gone to great lengths to ensure its CBAM is WTO-compliant and offers a level playing field.

The biggest strange thing of all is that CBAM, the main animating force behind developing country ire, does not at all have the effect that they claim to fear. It doesn’t shut anyone out and the incidence of its costs lies largely with EU consumers

(and to a subtle but important extent with relatively carbon-inefficient suppliers, wherever located, who don’t invest to keep up with their sector’s decarbonisation)

At #COP28 the UTM debate is being had grudgingly and has been popped into the Global Stock Take negotiations for somewhat arbitrary reasons. The negotiators have instructions and instincts but are not trade people or versed in CBAM. The result is exasperating!

A more constructive discussion is possible but it needs space, time and dedicated people who are allowed to grapple with the issues and can move beyond a defensive crouch. Even if UNFCCC is never the place where CBAMs are sorted, dialogue is good actually.

In the short term, surely there is a way through. Without mucking up demarcation, surely developed Parties can agree eg to note UNFCCC 3.5 and similar but more elaborate provisions binding GATT signatories; and perhaps note that it is their position that they are in compliance.

Word games and forum shuffles are embarrassing and unnecessary. Developed countries have a fine case on the merits for most if not all of what is attacked as UTM. Make it!

Meanwhile developing countries should do what Türkiye and India are already doing: find a pragmatic modus vivendi with CBAMs. Price carbon at home (T soon) or on exports to EU etc (I considering), and poor country govts will actually get revenue from EU consumers. Nice!

(while easing their own domestic transition and making low/no carbon investment more feasible everywhere)
Rant over! Off to COP again to see what actually happens

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