The podcast explores the challenges and risks of trade tensions in the global clean energy trade, including carbon border adjustments and multilateral trade agreements. It discusses the mission of Silverado, an organization focused on creating innovative policy solutions. The chapter also highlights the importance of revisiting assumptions about trade rules and the potential consequences of trade tensions in the clean energy transition. It delves into the challenges of determining carbon content and carbon border adjustments, and explores the potential impact of the upcoming presidential election on climate policies and trade.
Balancing open market access and control over future energy supply chains is a major challenge in global clean energy trade.
The global trading system needs to adapt to the clean energy transition by considering more agile defensive measures and challenging traditional trade disciplines.
Carbon border adjustments and WTO reform are necessary to address climate change and support the growth of clean energy.
Deep dives
Trade tensions and the clean energy transition
The growing focus on clean energy is putting strain on the international trading system, with new fault lines emerging and old rivalries reigniting. Policymakers face the challenge of balancing open market access with control over future energy supply chains. A fractured global market could slow down clean energy uptake, which is crucial for addressing the climate crisis.
Challenges facing global clean energy trade
The tension between the need for market access and the dissatisfaction with trade rules is a major challenge in global clean energy trade. Governments must consider new disciplines, more market access, and increased coordination among countries to support the growth of clean energy. Agile defensive measures and a re-examination of traditional trade disciplines are necessary.
Improving the global trading system for clean energy growth
The global trading system needs to adapt to the clean energy transition. Policymakers should consider more agile defensive measures and challenge traditional trade disciplines to accommodate the unique needs of the clean energy sector. Interoperability, rather than harmonization, should be the focus, ensuring that rules and policies support the rapid transition to clean energy.
The role of carbon border adjustments in trade
Carbon border adjustments, such as those proposed in the European Union, are controversial but could level the playing field for domestic industries facing stringent climate policies. However, concerns remain about the efficacy and fairness of these measures. The global trading system needs to address questions of equivalency and establish standardized methods for measuring carbon content in industrial products.
The need for WTO reform for climate objectives
WTO reform is necessary to address climate change and deploy clean energy effectively. Rules surrounding environmental goods, subsidies, national treatment, and quantification of climate outcomes need clarification and standardization. The WTO should prioritize interoperability and establish clearer guidelines for the trade of environmental goods and services.
Around the world, green industrial policy is driving a surge of new investment into clean energy. This is good news for the climate, but it puts the international trading system under intense strain.
As countries around the world vie for influence over the growing market for clean energy, new fault lines are emerging and old rivalries are re-igniting. With energy security still top of mind, policymakers face the difficult task of balancing access to an open market against control over the energy supply chains of the future. The risks of failure are immense—a fractured global market could slow clean energy uptake, which is vital for solving the ever-worsening climate crisis.
What risks do trade tensions pose for the energy transition? What are the major areas of dispute? And how can policymakers improve the global trading system to support rapid clean energy growth?
This week host Jason Bordoff talks with Maureen Hinman about the challenges facing global clean energy trade.
Maureen is the co-founder and executive chair of Silverado Policy Accelerator, a nonprofit organization that uses a venture capital approach to address policy challenges in cybersecurity, trade, geopolitics, and energy.
Before founding Silverado, she served as director for Environment and Natural Resources at the Office of the United States Trade Representative, where she led a range of trade policy initiatives focused on natural resource conservation. She has also served as the U.S. Department of Commerce’s senior industry trade specialist and as a consultant for Nathan Associates.
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