Mutually supportive trade and environment policies: indicators and quantitative analysis
subsidies, technology and innovation, and international financial flows (OECD, 2017[88]). The OECD also applies its indicator tracking expertise through the OECD Action Plan on the SDGs, endorsed by the OECD Council in December 2016. It uses a unique methodology for measuring the distance that OECD countries would need to travel in order to meet the SDG targets, set with reference to the level of ambition embodied in the wording of 2030 Agenda for Sustainable Development wherever possible. Where no clear target level is indicated in the 2030 Agenda, the plan relies on international agreements and expert opinion, and on benchmarking against the top performing 10% OECD countries. The indicators were gradually expanded in coverage between 2016 and 2019, when preliminary evidence on how these indicators have changed over time was also presented (OECD, 2019[89]). They are closely aligned with those in the UN Global Indicator List drawn from OECD sources and the UN’s SDG Global Database. As shown by this overview of work carried out in the last twelve years, the context for developing trade and environmental indicators is particularly dynamic and supportive, generating a growing set of indicators from which trade and environment indicators can be selected and refined. The current set of indicators has already proved useful to advance empirical analysis on several of the issues covered in this report. These issues often intersect at the crossroads between several broad areas of study: environmental policy tools, trade policy instruments and international competitiveness, where qualitative approaches need to be bolstered by quantitative analysis and modelling. There is considerable potential to exploit existing indicators for further analytical work. In addition, some trade and environment themes could benefit from the development of new and more precise indicators to help with policy design and evaluation (see Chapter 6).
pushed up the trade and environment agenda by more ambitious unilateral environmental policies and goals. In particular climate change mitigation policies, adopted or envisaged, have repeatedly been the focus for concern that unilateral measures to reduce GHG emissions could penalise domestic firms, especially those that are energyintensive and exposed to competition from countries with lower levels of regulation. A 2011 study for the JWPTE examined the topic of Trade-Related Measures Based on Processes and Production Methods in the Context of Climate-Change Mitigation (Moïsé and Steenblik, 2011[7]). The motivation for the study was that policies targeting adverse environmental impacts created in foreign lands as a result of producing goods for export were gaining prominence in the climate change debate. The ostensive purpose of PPMs is to promote better environmental outcomes and ensure that domestic climate change policies and incentives do not inadvertently undermine other objectives. Even though the general objectives of the reviewed regulations and private schemes are comparable (e.g. the promotion of renewable-energy sources, or provision of information on the carbon footprint of goods), the approaches, level of detail, choices of instruments and targeted environmental characteristics vary considerably from country to country and from scheme to scheme. Some regulations rely more or less extensively on market mechanisms, attaching price premiums to certain types of products. Others introduce command-and-control provisions limiting the use of certain PPMs, variously defined in different countries. Still others target certain types of fuels eligible for public support, with varying eligibility criteria. Private schemes mainly use environmental sustainability claims to secure consumer preference. The choice of different instruments presumably entails different trade impacts. PPM-based trade-related instruments include: l direct regulation such as import or export restrictions
COMPETITIVENESS AND THE POLLUTION HAVEN EFFECT The JWPTE’s interest in the effect of environmental measures on competitiveness dates back to its inception. It completed empirical research as early as 1993 on the pollution haven effect, i.e., whether increasing the costs of polluting through environmental policies incentivises industries to relocate to countries with laxer environmental regulations or to source inputs from these countries. The last fifteen years have seen this issue
on products not conforming to certain PPM requirements; l public authorities’ market-based interventions or
economic instruments, such as fiscal measures, environmental charges, taxes or subsidies, border-tax adjustments and countervailing duties; l attempts to enable informed consumer choice that
58 . OECD WORK ON TRADE AND THE ENVIRONMENT: A RETROSPECTIVE, 2008-2020
could in turn influence production patterns, notably ELIS.
