Our world is unsustainable right now in the way it operates. Our incipient macroeconomic recovery is very fragile and will be unsustainable unless we have what we promised we would have but do not yet have – a green recovery. We will not even be able to manage a short-term macroeconomic recovery unless we integrate strategies for climate change mitigation and adaptation into our macroeconomic policies.

Science has delivered a grim message. Reduce emissions of greenhouse gases by 90 per cent in the next 30 years or risk catastrophic climate change. The private sector and governments are taking their own initiatives to reduce the carbon footprint of consumption. This has important implications for developing country exporters.

Negotiations on liberalizing trade in Environ-mental Goods and Services (EGS) began with the launch of the Doha Round. Paragraph 31(iii) of the Doha mandate, agreed by all WTO members in 2001, calls for a reduction or elimination of tariffs and non-tariff barriers on EGS.

Developed countries bound by emission reduction commitments under the Kyoto Protocol, and expecting even stricter emissions targets, have begun to introduce cap-and-trade and carbon tax systems. These raise production costs and undermine competitiveness. Producers from developed countries may relocate their production to countries with no carbon restrictions. To prevent job losses in their countries and an increase of emissions elsewhere (“carbon leakage”), developed countries may use border adjustment measures (BAMs) aimed at adjusting emissions costs and restoring a level playing field for domestic producers. Carbon import restrictions can also act as an incentive for producers from uncapped countries to cut emissions.

In A Case for Climate Neutrality: Case Studies on Moving Towards a Low-Carbon Economy, participants of the United Nations Environment Programme (UNEP) Climate Neutral Network (CN Net) shared the challenges, rewards and occasional frustrations involved in pushing the boundaries on climate change.

In the foothills of the Himalayas in northern India, a project run by myclimate, a Swiss non-governmental organization, is creating new jobs and income opportunities, while reducing greenhouse gas emissions through new technology.

As countries grapple with the challenges of integrating economic interests with the management of climate change, trade and environmental policy have become increasingly entwined in the ongoing negotiations.

Climate change and broader environmental concerns have, as yet, had only a relatively minor impact on shaping the direction of economic growth in South-East Asia. However, prospects for change are expanding with growing global concern and increasing competition for and pressure upon available agricultural land and water.