New Delhi: At the COP29 climate talks on Friday, developing nations strongly criticized unilateral trade measures presented as climate actions, labeling them “discriminatory” and detrimental to global cooperation.
Developing Member countries argued these measures violate the principles of equity and common but differentiated responsibilities (CBDR).
On behalf of the BASIC group, China submitted a proposal to the UN climate body last month, urging that this year’s climate talks address unilateral trade measures like the EU’s Carbon Border Adjustment Mechanism (CBAM).
Despite the proposal not being included in the formal agenda after extended debate on the summit’s first day, COP29 President Mukhtar Babayev announced that consultations would be held on the issue, with the results to be shared at the end of the conference.
During the presidential consultations on Friday, India emphasized that this is a global concern requiring urgent attention to prevent the development pathways of developing countries from being hindered.
Other groups of developing countries, including the G77, the largest bloc representing over 130 nations at the UN climate talks, and Like-Minded Developing Countries also registered their strong opposition on the issue.
However, developed countries, particularly the European Union, argued that the United Nations Framework Convention on Climate Change (UNFCCC) is not the right platform to discuss this issue, as it is already being addressed by the World Trade Organization (WTO).
India said restrictive unilateral measures force developing and low-income nations to bear the costs of transitioning to low-carbon economies, undermining climate finance commitments from developed nations, which have historically benefitted from industrialization and contributed the most to greenhouse gas emissions.
“They effectively will result in the reversal of climate finance mobilized by the developed countries. It is like asking the victim to pay for the remedy,” it said.
“Any unilateral measures in the name of climate change responses are discriminatory towards developing countries and detrimental to multilateral cooperation. They violate principles of equity and CBDR-RC and the UNFCCC provisions,” it said.
India further said unilateral trade measures discriminate against countries seeking to industrialize through export-led growth by raising the cost of goods.
If the goal is to reduce global carbon emissions, climate policies must focus on offering concessional finance and building the capacity of countries to address both mitigation and adaptation, it said.
Bolivia, on behalf of the LMDCs, said this is a matter of critical importance for global equity, fairness, sustainability and international cooperation.
“While unilateral trade measures claim to address climate change, these are in reality exacerbating inequality and placing an undue burden on developing economies,” the Bolivian negotiator said.
“For decades, developed countries have reaped the benefits of industrialization at the expense of the global environment and impact on climate change. Meanwhile, developing countries have been striving to build equitable economies, achieve sustainable development, alleviate poverty, and improve the quality of life for their people.
“These measures can shift the responsibility for climate action disproportionately onto those who bear the least historical responsibility for global warming, further entrenching inequalities between developed and developing nations,” the Latin American country said.
Experts argue that trade policies tied to climate action must be discussed in inclusive forums like the UNFCCC, rather than being left to trade bodies like the WTO.
Trishant Dev, programme officer for climate change at Delhi-based think tank Centre for Science and Environment (CSE), said if climate-related issues are beginning to inform trade policies, it is crucial to create space for multilateral discussions on these measures.
“The WTO is not equipped to address CBDR yet. The UNFCCC is grounded in the principles of equity and CBDR, and its original text already cautions against unilateral actions that may negatively impact developing countries. Therefore, it is well placed to initiate this discussion on climate-related trade policies as other multilateral fora catch up,” he said.
One of the unilateral trade measures that developing countries have been strongly resisting is CBAM — the EU’s proposed tax on energy-intensive products, such as iron, steel, cement, fertilizers, and aluminum, imported from countries like India and China.
The tax is based on carbon emissions generated during the production of these goods. Both the United Kingdom and the United States are at different stages of imposing their versions of this mechanism in due course.
The EU has earlier argued that this mechanism creates a level playing field for domestically manufactured goods, which must adhere to stricter environmental standards, and help curb emissions from imports.
Finance Minister Nirmala Sitharaman last month termed CBAM “unilateral and arbitrary” and said such measures could potentially harm India’s industries and disrupt the balance in international trade.
According to CSE, CBAM will impose an additional 25 per cent tax on carbon-intensive goods exported from India to the EU. This tax burden would represent 0.05 per cent of India’s GDP.
(with agency inputs)
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