COMMISSION ON SUSTAINABLE DEVELOPMENT - 14
HIGH LEVEL SEGMENT
Wednesday 10 May 2006
OPENING REMARKS BY MR. PASCAL LAMY
WTO DIRECTOR-GENERAL
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Ladies and gentlemen,
It is my pleasure to participate at this important event. Allow me to begin
by congratulating you on your choice of topics for CSD-14. In having chosen
to focus this particular session of the CSD on "energy for sustainable
development," looking also at the related issues of industrial development, air
pollution, and climate change, you have chosen a very timely subject.
Sustainable development must become a key driver of energy policy.
Evidence of the environmental damage that our current energy policies are
causing is mounting every day. The Artic Climate Impact Assessment report
has given us important indicators of the rate at which are our climate is
changing. The report notes that in the Artic Sea, summer ice has decreased by
nearly 27% in the past 50 years, in part, due to global warming. Moreover, the
rate at which we have been losing Artic ice has accelerated by some 20% in the
past 30 years. Global warming has now become the most serious environmental
challenge of the century. Our energy policies have also taken their toll on
human health. This is not surprising since most people are obliged to continue
to live in the environment they pollute. Many of the world's biggest cities are
now suffering from serious air pollution due to transportation and industrial
development. High levels of lead in the human bloodstream is only one of many
consequences.
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Today, the global economy continues to be fossil fuel-driven, relying
mostly on oil, coal, and natural gas. Only 14% of the world's primary energy
supply is from renewables. According to the International Energy Agency, if
existing patterns of economic development continue, the world's energy needs
are likely to rise by almost 60% in 2030. How, then, do we intend to deal with
this growing demand? It is clear that adjustments need to be brought to our
energy policies. We need to meet our growing energy demand without putting
either human health or the environment at risk. We must also deal with the very
complex issue of energy security. In a world that is increasingly interdependent,
countries are - quite understandably - concerned about the reliability of their
energy supplies. While none of these issue are easy to resolve, over the past
week this forum has raised awareness and generated ideas.
Turning now to trade (which is as you know is one of my favourite topics
at the moment), it is undoubted that trade plays an important role in energy
policy. Trade can bring about greater energy security for countries that are not
themselves energy producers. It is also an extremely important source of
revenue for energy exporters. It is said that trade flourishes at times of peace.
But I would argue that orderly trade in energy can itself contribute to world
peace. While WTO rules have set the beginnings of an architecture to address
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the trade-related aspects of energy, these rules may need to evolve in future to
address energy trade more comprehensively.
The composition of the WTO's membership will be one of the
determinants of how quickly this process comes about. Only recently Saudi
Arabia joined the WTO, bringing an important part of energy trade under the
purview of the organization's multilateral rules . Several other energy producers
are line to acceed, such as Russia, Kazakhstan, and Algeria.
Since 1990, developing countries have accounted for around 60% of
world's annual fuel exports. Clothing is the only other sector where they have
achieved such dominance. Although most developing countries export fuels to
developed countries, trade amongst the developing world has been rising. This
has mainly been due to increased demand in Asia, in particular in China, Korea
and India. Most trade in energy takes place at very low, or sometimes nonexistent
duties; particularly in terms of developed country imports. But there
are other barriers to trade in energy, such as export restrictions and quotas, and
restrictions on transit. Such barriers will need to be addressed, albeit gradually.
Of course the transportation of goods involves the consumption of
energy, whether in the course of maritime, road, or air transport. It is vital for
countries to internalize the negative environmental externalities that arise in the
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course of this process. The harm done to the environment must begin to feature
as a "cost" in international trade transactions.
In the Doha Round of trade negotiations countries are seeking to open
trade not only in goods, but also in services. A number of countries have tabled
offers on various kinds of energy services, such as distribution and pipeline
transportation. Some of these offers have been made possible by the gradual
opening of the energy sector that has taken place at country level, and the
shrinking of state monopolies. The energy sector is increasingly being
subjected to greater competition. This is a welcome development, which has
now found its reflection in the Doha Round. In a world where 2.4 billion
people still rely on traditional biomass - wood and agricultural residues ? for
cooking and heating in their homes, and where 1.5 billion do not have access to
electricity, energy services can play a vital role. Enhancing access to such
services would make a direct contribution to the fulfillment of the Millennium
Development Goals. I take this opportunity to ask all countries to engage in
these negotiations, and to step up existing offers. I also take this opportunity to
emphasize that the opening of services markets is not synonymous to the
deregulation of those markets. Countries are completely within their rights
under the WTO to continue to regulate their services sector, provided they do so
non-discriminatorily.
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Having spoken about the market opening potential of the Doha Round in
energy, let me now turn to its sustainable development dimension. Negotiations
on the trade liberalization of environmental goods and services, as well as on
the relationship between WTO rules and multilateral environmental agreements,
could have a positive impact on the energy sector. Having said that, the WTO's
contribution to sustainable development would only be effective if it is made
part of a broader effort by more specialized international institutions, such as
UNEP, towards this goal.
In environmental goods and services, negotiators are seeking to liberalize
trade in the kinds of products and services that could either prevent or limit
pollution, or contribute to environmental clean-up. In addition, some WTO
members would like to include products that are superior to others in terms of
their environmental performance; for instance, in their energy efficiency.
Examples of the environmental goods that have been proposed are wind
turbines, solar panels, geothermal energy sensors, fuel cells, and electricity
meters. Lowering barriers to trade in renewable energy could reduce its price,
making it a more viable alternative to the more polluting fuels. Environmental
services, such as consultancy services, have also featured in some of the
services offers that WTO members have tabled. Such consultancy services in
the energy sector could help countries boost their energy efficiency.
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Once again, I would like to encourage WTO members, most of which are
participants at your session ? developed and developing alike - to pursue these
negotiations more forcefully because of their important environmental
dimension. In many of the developing countries that have experienced strong
economic growth in the past few years, emissions have also risen; in some
instances by up to 75%. In the US, the EU and Japan the transport sector has
seen the fastest growth in greenhouse gas emissions, with emissions from
international aviation growing far more rapidly than other transport sectors.
Greater access to environmental goods and services can help combat these
emissions, which pose both a health and an environmental challenge to all of us.
In the WTO-MEA negotiations, WTO members are discussing ways to
ensure the harmonious co-existence between WTO rules and the various MEAs
that have been negotiated to protect our environment. It is undoubted that
greater coherence between different bodies of international law, and in
particular between the trade and environmental regimes, could lead to improved
global governance. I would also urge that these negotiations continue to go
forward.
Ladies and gentlemen, while energy is vital to economic growth, how we
use energy is equally vital to our health and environmental wellbeing. There is
no magic recipe for an ideal energy policy ? one that would respond to all our
needs. So we must simply continue to labour and to search for solutions - in
part through the CSD. I would wish you all the best of luck in your
deliberations.
Thank you for your attention.
