Trade policy, climate change and the greening of business

John A. Mathews*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

1 Citation (Scopus)


There is under way a worldwide greening of industry, driven by the huge demand generated by China and India as emerging industrial giants whose growth cannot be accommodated by ‘business as usual’ fossil-fuelled development—for reasons having as much to do with energy security as concerns over global warming and climate change. While the role played in this process by fiscal and industry policies (e.g. carbon taxes and other market-based incentives) is well understood (even if not pursued currently in Australia), the potentially powerful leverage to be exercised by trade policy is under-recognised. There are some positive developments such as a proposed Environmental Goods Agreement being discussed in Geneva, while there are negative developments embodied in various bilateral and regional trade agreements such as the proposed Trans-Pacific Partnership (TPP) agreement, to which Australia has committed itself. There are rising levels of conflict over trade and climate change mitigation measures, in actions brought at the WTO against countries looking to promote green industries through measures like local content requirements being attached to foreign direct investment, or by countries imposing border tax adjustments against exporters who allegedly fail to implement carbon taxes. The issues involved are discussed in this paper and possible ways forward are proposed, along with some implications for Australia.

Original languageEnglish
Pages (from-to)610-624
Number of pages15
JournalAustralian Journal of International Affairs
Issue number5
Publication statusPublished - 3 Sept 2015


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