Briefing of the WTO Committee on Trade and Environment

Remarks by Mr. Sha Zukang, Under-Secretary-General for Economic and Social Affairs, Secretary-General of The 2012 UN Conference on Sustainable Development

Ms. Chairperson,
Ladies and Gentlemen,

It is a pleasure to be here today. I am honoured to speak to you in my capacity as Secretary-General of the United Nations Conference on Sustainable Development (Rio+20).

I thank the Chairperson, Ambassador Harun (Malaysia) for inviting me.

Almost twenty years after Rio 1992, the obstacles to implementing sustainable development are daunting. The financial, food, and fuel crises and the effects of climate change make these obstacles even more apparent.

But we here are fortunate. Because we have the opportunity to help make sustainable development a reality.

Today, I will make some general observations about Rio+20 and green economies. I will also share some thoughts on relevant links between the work carried out by this Committee and the objective and themes of the Conference. Finally, I will close with information about Rio+20 preparations.

Let’s start with some general information on the Conference and green economies. What is the Conference supposed to accomplish?

The General Assembly resolution identified three objectives for Rio +20:

The two themes are: a green economy in the context of sustainable development and poverty eradication and the institutional framework for sustainable development.

In the first two Preparatory Committee meetings and the first informal Intersessional meeting, Member States expressed concerns regarding green economies.

They want to know what a green economy actually looks like. What are the implications for development prospects? For trade? And for the competitiveness of different countries?

We all know that a green economy will have to be built from the bottom up in each country. It will depend on national characteristics, endowments and priorities.

Countries will look to the UN system, however, for guidance on the kinds of policies they can adopt to move along a green development path.

So, one thing that member States are likely to want at Rio+20 is a “menu of policy options” for a green economy.

Some countries refer to a roadmap with milestones and indicators of progress at different levels – national, regional and international.

If green economy is to prove a useful concept to member States, it must help them accelerate progress towards sustainable development. A green economy should identify more synergies than trade-offs between environment and development. Ideally, it can help build dynamic new growth sectors around green technologies low-carbon energy and sustainable agriculture and fisheries.

Many of the activities involved in building green economies are relatively labor-intensive. Therefore, a green economy should offer employment options. It should also open up new export opportunities in green products and services.

This transition will mean structural changes. And this may be challenging. In particular, commodity exporters, especially but not only fossil fuel exporters, will feel an impact. Naturally, these countries are concerned about adapting to a new situation. They will need to develop new industries and help their populations adjust.

Green economy will force change. But change is constant. Countries must always be prepared to adapt to changes in market demand and changes in technology. Resilient and flexible economies successfully adapt.

The scale and speed of the changes may be bigger and faster than in past technological revolutions. If so, international cooperation will be even more important to ease the transition for those whose jobs and incomes might suffer.

Green economies are in everyone’s best interest. We have no choice if we are going to raise living standards and advance human development on a finite planet.

Therefore, the journey from Rio+20 will be a common journey. It will involve all of us taking a green economy path to sustainable development. On this path our economic activities don’t destroy the environment.

Being on a common journey means we must find new ways to cooperate in the international community. And as it is about the economy – a green economy, we must find new forms of economic cooperation.

Countries are asking what international institutions – such as those supporting trade and development assistance, including in the UN system – can do to facilitate an equitable transition to a green economy.

Ladies and Gentlemen,

We know how important trade has been to global economic growth over the past few decades. We know how central it is to some of the most dynamic economies in the world today. Among other benefits, trade has contributed to the most massive assault on poverty in human history.

Trade is what greases the wheels of the global economy. It raises welfare of both producers and consumers – through higher wages and lower prices. And it also facilitates the transfer of technology.

Much technology crosses borders embodied in machinery in wind turbines in solar panels in biofuels and hybrid vehicles. Without trade, these technologies would be much more expensive than they are. They would also be much less accessible.

The question we ask ourselves today is how to ensure that trade greases the wheels of a green economy. Right now, one concern is that a green economy might become an additional impediment in trade relations.

This is not necessary. We need an open multilateral trade regime with enhanced market access for developing countries. It is crucial both for accelerating their development and for ensuring the sustainability of that development.

The costs of green technologies, like renewable energy, are being driven down, in no small measure by large-scale production for a global market. Consider as for example – solar photovoltaic panels and wind turbines. Trade benefits suppliers of green technologies with a larger market. And it benefits buyers with lower prices.

Nevertheless, there will be structural changes in economies and this creates concerns. However, the process of economic development itself involves structural changes. It is inevitable.

Developing economies move from agricultural dependence towards growing industrial capacity. Then services become the predominant sector at high levels of development.

Some sectors grow, others shrink; jobs are created, jobs are destroyed. But incomes and living standards rise sustainably with overall productivity.

In the same way, a green economy transition will involve changes. The important thing is that those changes promote economic diversification. This will yield sustainable improvements in well-being for all, now as well as in the future.

What is clear is that an open and fair multilateral trade system is an integral part of an international sustainable development architecture. Discussions of how to promote a green economy need to continue within that framework.

Only by addressing the concerns of all countries can Rio+20 succeed in reaching agreement and producing a shared and actionable outcome.

You might recall that last October UN-DESA and UNCTAD organized an ad hoc expert group meeting on the green economy here in Geneva. It identified fundamental steps towards a feasible transition for industrialized economies:

This coming fall, another meeting focusing on trade and the green economy will be organized by UNCTAD in collaboration with my Department. The aim will be to assist countries in gaining further clarity on these issues.

Ladies and Gentlemen,

With less than one year to go, we are now firmly on the road to Rio+20. I hope the international community, including bodies such as this Committee, consider how the international trading system can assist countries who choose a green economy path.

Beyond the principles we already have, what else is there? What other agreements are needed? What trade-related instruments should we design and implement?

You know better than I do that the current WTO rules do not provide sufficient clarity. There is no multilateral consensus on what constitutes acceptable pra

ctice, for example, with respect to “green subsidies”.

Without guidance, it is likely that green-related disputes will be referred to the WTO’s dispute settlement mechanism. This could risk undercutting the multilateral trading system.

I hope that all of us – but especially those with trade expertise — focus on these hard questions and make progress in answering them in coming months.

Now let me share a brief overview of preparations for Rio+20.

There are 333 days to go, and much will happen during this time.

National preparations are underway, including through the coordinated assistance of DESA and UNDP. These two organizations are assisting up to 60 developing countries prepare for the event.

Countries are also holding intersessional meetings:

Sub-regional consultations are under way, including three SIDS specific ones. These will culminate in five Regional Preparatory Meetings coordinated by the UN Regional Commissions. These will be organized in collaboration with the UN system and IFIs at the regional levels.

Later today, I will be meeting with the Principals of UN specialized agencies, funds and programmes, including Mr. Lamy. We are meeting as part of the ongoing inter-agency collaborative process I set up over a year ago (through the expanded membership of the Executive Committee on Economic and Social Affairs).

Furthermore, the Environment Management Group as well as the UN Development Group are contributing to preparations within their respective mandates. To establish synergies, I meet with the two co-chairs of those inter-agency mechanisms in a Troika format.

Currently the UN system is producing a study pertaining to strengthening the institutional framework for sustainable development (IFSD). The assessment is expected to contribute to the discussions of Member States and other stakeholders in preparation for Rio+20.

Major groups (as civil society is defined by Agenda 21) are also actively engaged in preparations. They include NGOs, businesses, farmers and others. These major groups are expected to forge coalitions and work with governments to advance sustainable development.

The next important deadline for all stakeholders is 1 November. By this date, we expect to receive all inputs to a compilation document that will form the basis for the “zero draft”.

Informal negotiations will start in January 2012. They will culminate in the last PrepCom meeting to be held in Rio the week prior to the Conference.

The next 333 days will move quickly. The United Nations counts on input from all of you to make the Rio+20 conference a success.

In 1992, the Earth Summit first identified linkages between trade, environment and development.

Let’s now, with our 20 years of experience, assess how trade can support the transition to green economies.

Thank you.