Examination of Witnesses (Questions 60-69)
DR PAUL
JEFFERISS AND
MS ALEX
GONZALEZ-CALATAYUD
11 JULY 2006
Q60 Mr Vaizey: Can we just talk about
the mechanics? You say in your written evidence that the Department
of Environment, Fisheries and Rural Affairs team is on the margins,
did not have a grip on the environmental outcomes. Is there a
way that we can improve Defra's performance at trade negotiations?
Ms Gonzalez-Calatayud: I have
to say that I was not in Hong Kong, a colleague of mine went,
but I believe that it is necessary for other government departments
to involve their colleagues more in negotiations.
Q61 Mr Vaizey: Do you think there
is a lack of communication between the Defra team and the main
team doing the negotiating?
Dr Jefferiss: I do not know. I
have been at various international negotiating processes, not
specifically trade related ones I have to say, but others like
the Johannesburg summit on sustainable development, for example.
And I think the problem is less a lack of communication between
the various departments and more of an imbalance of political
power amongst departments, combined with the practical necessities
of any international negotiating process. By which I mean that,
first and foremost, the primary objective of the negotiating team
has to be addressed first, and most directly. And in the context
of trade negotiations, for better or for worse, rightly or wrongly,
the primary objective is to agree the economic terms of trade.
And although environmental considerations will have been prepared
in advance, they are not necessarily applied as rigorously or
consistently or urgently as the economic negotiating positions
that have been determined in the past. So to the extent that they
are introduced they tend to be introduced, I think, rather late
in the day in rather an ad hoc fashion and often in the
form of trade-offs. Which is part of the reason I was suggesting
earlier that the relationship between the economic and environmental
aspects of trade ought to be integrated more strategically and
multi-laterally in advance and explicitly through a kind of in-principle
process of its own, rather than always being re-invented in an
ad hoc way through the process of individual negotiating
processes where environment is tacked on at the end, if at all.
Q62 Mr Vaizey: You mentioned greenhouse
gasses have not yet been taken up by negotiators and presumably
that is because, as it were, they see their first job as economic
negotiation rather than environmental negotiation. I mean is there
a way that greenhouse gasses could be put on the table at a WTO
negotiation do you think?
Dr Jefferiss: That is what I would
like to see, exactly that kind of thing. Greenhouse gasses are
probably the clearest and most obvious example of a way in which
trade adversely affects the environment and therefore could be
dealt with strategically through the WTO as well. But I think
there are other aspects of trade-related environmental damage
that could similarly be addressed in a strategic manner upfront,
including things like habitat loss and degradation or other forms
of pollution or natural resource exploitation. So absolutely,
I do think there is room for a dedicated multi-lateral explicit
negotiation of this relationship. Whether it is conducted under
the auspices of the WTO or separately, I do not know, but, as
I said before, I think at the end of the day if the WTO itself
does not take on board the conclusions of such a process, then
it will be difficult to actually implement it.
Q63 Mr Vaizey: One of the potential
contradictions, it seems to me, is that if you recognise the force
of the argument that the developed world should lower its trade
barriers, but that the developing world should enjoy a measure
of protection, there is a counter argument to that which is an
environmental argument of course which is based on issues like
food miles and also the loss of bio-diversity in developing nations.
Is there a way of squaring that circle as it were?
Dr Jefferiss: I think some of
the ways of squaring that circle can be conducted through the
trading system, in which there is essentially some kind of quid
pro quo, as there is in all trading situations, whereby any
demands placed on a developing country to meet certain protocol
standards are supported through various kinds of capacity-building,
either direct financial support or market infrastructure support
or technology transfer, means of that kind through the trading
system. But I think there are plenty of processes, if you like,
that run in parallel to the trading system that could be used
to reinforce that general trend. So, for example, the $20 billion
energy investment fund that the World Bank is currently discussing
and that the Chancellor has strongly supported, I think would
provide a very good opportunity for that kind of mutual reinforcement,
provided that the energy investment fund were not only to provide
access to energy in the developing world, but to provide access
to low carbon energy, or sustainable energy, which at the moment
is not entirely clear. And then in addition to that there are,
of course, a number of aid and development programmes which could
provide further reinforcement and, as we know, DFID's budget is
currently being augmented. And that those aid and development
budgets could, in ways that they are not currently, be mainstreamed
more towards environment and natural resource protection in order
to protect the resource base on which developing countries can
develop their economies. And it seems at the moment there is active
discussion on devoting a larger proportion of aid to climate adaptation,
to a lesser extent mitigation. But I think there is a strong argument
that aid budgets should be augmented rather than re-directed for
those purposes, on the grounds that whereas aid is in, if you
like, the interest of the developing country and of the globe,
to try and improve the quality of life for everyone, I think there
is an argument that aid monies for climate adaptation and mitigation
should be provided for a different reason, and that is that the
polluter should be paying for the damage that they have historically
caused.
Q64 Chairman: Can I follow up on
that point about the energy fund, which you suggest there was
a little bit of doubt about whether it is going to be clean energy
or not? 20 million; can you just remind me if that is an annual
figure or over five years, or something like that, can you recollect?
Dr Jefferiss: I think that is
a total figure and it reflects the notion that there would be
a 50/50 public/private split.
Q65 Chairman: I am just trying to
put this in context, because the World Bank suggests that every
year up until 2030 global investment in energy, all energy, will
be in the order of $300 billion a year, so we are maybe looking
at less than 10% of that specifically earmarked for clean energy
and this is all intertwined with the way that trade operates clearly.
Are you optimistic on those figures that we are actually taking
this issue seriously?
Dr Jefferiss: I think you are
absolutely right that as a percentage of likely investment in
energy infrastructure overall is quite small, significant though
$20 billion is. Ironically I am reasonably optimistic that some
such programme will go ahead, because I think it will be driven
in large part by the self-interest of business in developed countries
in promoting their goods, services and technologies overseas.
You know it is a market opportunity for the export of expertise,
equipment and so on from the developed world to the developing
world. Which is one of my concerns, that unless the energy investment
fund is directed towards establishing the capability to manufacture
and service energy components and infrastructure in the country
to which it is delivered, I fear that it could have the effect
of establishing a long-term dependency for energy, various components
of the energy infrastructure and system, rather than establishing
self-sufficiency. But for those reasons, because there is self-interest
to western exporting business, I think that it is not a figure
that it is so large that it could not be actually met. Whether
governments will match private investment to the tune of $10 billion
I suppose I would be less optimistic because their track record
on delivering aid for adaptation to climate change that has already
been committed through various fora is not a good one.
Q66 Mr Caton: Continuing with Doha,
the Doha Declaration authorised negotiations on the reduction
or elimination of tariffs on environmental goods and services
and some WTO members are very positive about this approach, seeing
it as a way to address environmental concerns through trade. However,
we have heard criticisms, it has been suggested it may be too
simplistic and unable to address all sustainable development concerns.
Do you have any thoughts on this?
Dr Jefferiss: I mean, yes, I think
the problem is that the definition of environmental goods and
services is not sufficiently clear to be confident that we will
get either a positive or a negative outcome from liberalisation
in those sectors. Obviously if environmental goods and services
are defined to include the provision of energy or water or various
types of essential life support systems which are environmental
in a sense, but through means which are in one way or another
not sustainable, they're no longer "environmental" and
so I think it all depends and it all depends too much on, probably,
at the end of the day, political power rather than any kind of
objective assessment of what is or is not environmentally beneficial.
Ms Gonzalez-Calatayud: In the
way the negotiations are proceeding at the moment it is also very
unsatisfactory because, as my colleague said, it all depends on
the definition and what is being proposed at the moment is just
a list approach which to us seems very inflexible and which will
not address the nuances that exist in goods, because depending
on the context a good can have an environmental use or it can
not have an environmental use, so we are not very optimistic as
to the environmental outcome of these negotiations and for a more
realistic approach which only focuses on so-called clean technologies
obviously it only favours the commercial interests of developed
countries and gives them a way of increasing exports of their
products which is something that will not really give developing
countries much confidence in the honesty of the concerns that
developed countries express about their environmental issues.
Dr Jefferiss: I think it is very
similar to the concern I expressed about the energy investment
fund. At the moment it is sufficiently vague that it could encompass
all sorts of energy technologies and infrastructure that we would
not consider to be environmentally sustainable rather than being
clear about the need for any such investment fund to focus either
mainly or exclusively on the sustainable options.
Q67 Mr Caton: You have been quite
positive about the EU's sustainability impact assessment, even
perhaps looking for an enhanced role for them, and equally I think
the one prepared for Doha was valuable, but at the same time you
have said it has been virtually ignored. How do we get that sort
of assessment nearer the centre of negotiations?
Ms Gonzalez-Calatayud: First of
all, I guess one of the shortcomings of the current sustainability
impact assessment is that they have not involved the EU's trading
partners enough so that there is no real ownership of the results
of these assessments and obviously that is a necessary step because
many of the measures that are being proposed to address the impacts
of trade liberalisation must be taken in other countries, so we
are really dependent on the goodwill of others, but I think maybe
what we have not seen that there is sufficient political will
at the top of the EU to take the results of the SIAs into consideration.
If we look at the DG trade for instance and Commissioner Mandelson
has mentioned the SIA results only in a very limited fashion and
of course if he does not take that seriously enough why will others
do that?
Dr Jefferiss: I think it is absolutely
right to say that in order to mainstream the conclusions of these
analyses requires political will from the top. I think it is quite
difficult for any individual negotiating entity to do that without
risking sacrificing or compromising their individual, (either
country or negotiating block's), self-interest in the outcome
of the negotiations. Which is why I have been stressing the need
for a multi-lateral international parallel process, if you like,
to the sustainability impact assessment. And something which we
advocated before the Doha round even began was the need for the
WTO to undertake a thorough-going sustainability impact assessment
of the trading system as it currently is before starting to change
it, and particularly before starting to liberalise it in ways
that might have further environmental impacts. And we felt that
it was self-evidently good policy to undertake a stock take, an
audit if you like, of where we are now and to try and understand
what the effects of changing where we are now might be on the
environment and on other aspects of sustainable development. But
of course that has not happened and so it is hard for any individual
entity to do it on its own in a meaningful way.
Q68 Mr Caton: The EU sustainable
development strategy calls for the consideration of global sustainable
development in EU policy making, as well as stressing the role
that the EU can make in promoting sustainable development worldwide.
Is this strategy being delivered in practice?
Dr Jefferiss: Are you asking whether
the EU's internal strategy is, of itself, delivering sustainable
development or those aspects that will affect other countries
are being undertaken in a sustainable way?
Q69 Mr Caton: The question implies
both, because we are concentrating on trade today. I am thinking
of things like the WTO bilateral trade agreement, is it being
delivered?
Dr Jefferiss: My own view is that
some attempts by the EU and the UK, for that matter, to move in
the right direction, to be more sustainable, particularly from
an environmental point of view, are being thwarted, or at least
made more difficult, if you like, actually by the WTO itself and
particularly the chilling effect that the perception that the
WTO will rule against environment in the case of disputes will
have. And what I mean by that is that I think whenever there is
a tendency for the EU or the UK to do something good for the environment
that might be construed as being a protectionist measure or that
could arguably be, what happens then is that, because there is
the fear of that, it gives business in particular leverage to
argue that, whatever the measure was, it should be made a bit
weaker, or that its introduction should be delayed, or there is
protracted discussion around exactly what it should be, whether
it should be more flexible or more voluntary and less mandatory.
And a particularly good example of that at the moment is the original
proposition to introduce certification on bio-fuels production.
Because if we are going to have bio-fuels, if we are going to
publicly support bio-fuels for the purposes of reducing carbon
dioxide, which is a very laudable cause, it would be reasonable
to have certification that bio-fuels were actually reducing carbon
dioxide and were not in the process damaging the environment in
some other way. Because if they are not reducing carbon dioxide
and they are damaging the environment in some other ways, then
they are not just useless, they are actually worse than useless.
So it seemed reasonable to propose a certification process, but
almost as soon as such a proposal was made there were objections
raised particularly by the bio-fuels industry but others too that
the WTO will not entertain any kind of certification process because
it will be perceived as a trade restrictive measure. Whether or
not that is actually true, the perception that it is true has
had a chilling effect. And it seems to me a pretty poor state
of affairs if, because of the WTO, or the perception of the WTO,
we cannot even have environmental measures that are designed to
check that an environmental commodity that exists only to serve
an environmental purpose—bio-fuels—is actually serving
that purpose. And if we are told we cannot do that—at the
moment people are discussing reporting of greenhouse gasses rather
than actual certification or their level,— then it just
seems to me regrettable that there should be this tension between
the desire to move in a sustainable direction and barriers to
doing that that are partly the result of WTO.
Mr Caton: Thank you very much, that is
a very telling example.
Chairman: Thank you both very much for
coming this morning, it has been rather chilling perhaps listening
to some of the evidence, but thank you again.
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