This paper surveys the state of knowledge about the trade-related environmental consequences of a country's development strategy along three channels: (i) direct trade-environment linkages (overexploitation of natural resources and trade-related transport costs); (ii) 'virtual trade' in emissions resulting from production activities; and (iii) the product mix attributes of a 'green-growth' strategy (environmentally preferable products and goods for environmental management). Trade exacerbates over-exploitation of natural resources in weak institutional environments, but there is little evidence that differences in environmental policies across countries has led to significant 'pollution havens.' Trade policies to 'level the playing field' would be ineffective and result in destructive conflicts in the World Trade Organization. Lack of progress at the Doha Round suggests the need to modify the current system of global policy making.
This handbook aims to foster a better understanding of the interlinkages between international trade, the environment and the green economy. It therefore focuses on national and international trade policy and rules, on environmental governance and principles, and the relationship between both.
There are many challenges and obstacles facing developing countries in moving their economies to more environmentally friendly paths. On one hand, this should not prevent the attempt to urgently incorporate environmental elements into economic development.
This paper provides a detailed explanation how the law of the World Trade Organization regulates environmental subsidies with a focus on renewable energy subsidies.