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Mainstreaming Environment into Aid for Trade

Aaban Butt
July 30, 2013

The WTO’s Aid for Trade (AfT) Global Review in Geneva last week was an opportunity for ITC and its partners to hold a side event on how to “mainstream” environment into Aid for Trade. AfT is defined as any form of aid that beneficiary countries consider to be “trade related”. It is annually worth around USD 600m and is directed to building infrastructure and delivering capacity building for trade policy and trade promotion.
 
The side event “Mainstreaming environment into Aid for Trade” was organised in partnership with International Centre for Trade and Sustainable Development (ICTSD), International Institute for Sustainable Development (IISD), Foreign Affairs, Trade and Development Canada and the Ministry of Foreign Affairs of Denmark.
 
AFT mainstreaming panelists
Panelists at Mainstreaming Environment into Aid for Trade
 
Jean-Marie Paugam, Acting Executive Director of ITC opened the event. He outlined that for ITC, mainstreaming environment into AfT means “Harnessing export opportunities for green products and services and strengthening the environmental sustainability and climate resilience of trade". The presentations gave examples of how AfT can direct resources into these two areas.

Peru’s success into exporting biodiversity based products

Aid for trade has a role to play in exploiting market opportunities particularly for biodiversity based products as biodiversity trade benefits rural communities. His Excellency Mr. Luis Enrique Chávez Basagoitia, Permanent Representative of Peru in Geneva highlighted that 10,000 people in rural Peru are currently working in the biotrade sector earning 30 per cent higher incomes than those in other commodities. He cited UNEP’s projection that if current trends continue, 250,000 new jobs will be created in the next decade in this sector. Aid for Trade can increase direct support for environmental businesses.

New IISD Handbook

Chris Beaton, research analyst from the International Institute for Sustainable Development (IISD) presented findings from IISD's new publication ‘Integrating Environment into Aid for Trade: A handbook’. This publication provides hands-on advice to practitioners on how to include environmental considerations in development projects. The main opportunity for AfT in mainstreaming environment is the following:

  • Role of strategic environmental assessments: Offer practitioners a very methodical way to think through impacts to see how they can harness issues to do with the environment to increase exports and minimise environmental impacts.
  • Standards and accreditation: this is an issue for a range of countries particularly through the green economy. AfT can assist companies gets accredited by setting up bodies to help industries understand what different certification schemes require.
  • Fostering cleaner production: This will be through interventions at plant level. Efficiency can make countries more cross competitive. AfT should make finances available so companies can invest in cleaner production.
  • Strengthening climate resilience and sustainable sourcing.

Alex AfT Mainstreaming environment
L-R: Mr. Luis Enrique Chávez Basagoitia, Chris Beaton, Alexander Kasterine
  
Improving sustainability in Global Value Chains


Consumer demand and trade is also driving negative environmental impacts including carbon emissions, water and air pollution as well as biodiversity loss. According to a study published in 2012 in Letter to Nature by Lenzen et Al., 30 per cent of global species threats are due to international trade. Alexander Kasterine Head of Trade and Environment Unit at ITC outlined the valuable role that Aid for Trade can play in raising awareness about these impacts and providing capacity building support to improve management of natural resources linked to trade. He presented findings of an ITC/IUCN/TRAFFIC study on the Trade in Southeast Asian Python Skins that raised awareness on the illegality, animal welfare and conservation issues in the trade in a raw material for the luxury fashion sector. This study has led to further public-private cooperation with Gucci on building capacity to improve the sustainability in this global value chain.

Technology improving Local Value Chains

Innovative technologies are the answers to issues such as deforestation, unemployment and food waste. Stefan Maard from the Danish Biotechnology Company- Novazymes shared experiences of his companies successful investment experience in reducing Mozambique's reliance on burning charcoal for energy through an innovative and scalable ethanol fuel technology. Charcoal is a USD 10 billion industry in Africa alone and is a major source of deforestation, greenhouse gas emissions and indoor air pollution. Novozymes has also developed a food processing plant that generates fuel ethanol from food waste. The technology has already created local jobs, improved household incomes and led to reductions in deforestation and greenhouse emissions.

AfT and Climate Change Mitigation and Adaptation
 
There is an opportunity and legitimacy for AfT to provide co-financing for Least Developed Countries to adapt to climate change. This is justified particularly because many adaptation projects have clear trade impact. Vinaye dey Ancharaz from the International Centre for Trade and Sustainable Development (ICTSD) stated that out of the 211 active National Adaptation Programmes of Action (NAPA) activities, 58 have a clear trade impacts. On the mitigation side, AfT can enhance mitigation through investments in economic infrastructure including clean energy technology, energy efficient transportation, greener buildings as well as improve the productive capacity through projects that limit agricultural exploitation and put caps on greenhouse emissions.

Climate Change: Kenyan tea farmers adapting to an uncertain future.

ITC’s Trade and Environment Unit showed their new video on an ITC-Danida project on climate change mitigation and adaptation in Kenya’s tea industry. This can be found here.


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