Creating intergovernmental environmental clubs is a prominent policy proposal for addressing glob... more Creating intergovernmental environmental clubs is a prominent policy proposal for addressing global environmental problems. According to their proponents, environmental clubs provide an incentive to join them and accept their environmental obligations by generating exclusive “club goods” for their members. Yet, the existing literature considers environmental clubs as a theoretical idea that still has to be put into practice. This article asks whether, in fact, the numerous international environmental agreements (IEAs) containing trade-related provisions provide club goods to their parties. It does so by investigating the effects of these provisions on trade flows among parties compared to flows with non-parties. We introduce an original dataset on 48 types of trade provisions in 2,097 IEAs that we make available with the publication of this article. Based on this new data and a panel of worldwide bilateral trade flows, we find evidence that existing IEAs and their trade-liberalizing...
This study explores to what extent the COVID-19 crisis affects the long-term prospects for indust... more This study explores to what extent the COVID-19 crisis affects the long-term prospects for industrial development. The focus of the study is on latecomer economies – those facing an uphill battle because they joined global markets at a point in time when other economies had already established global production networks.<br>In a first step, we analyse how the prospects for industrialisation are changing, mainly as a consequence of three global megatrends: digitalisation and automation of production; global economic power shifts; and the greening of economies. These trends create new opportunities for latecomer industrialisation, but they also raise entry barriers to markets, especially for country with weak innovation systems.<br>We then explore COVID-19 effects through the analytical lens of the pre-COVID megatrends. While the pandemic has had a severe impact on the world economy, such impacts will not change the ongoing trends fundamentally. The ongoing recovery from C...
The European Commission unveiled the Carbon Border Adjustment Mechanism (CBAM) in July 2021 as pa... more The European Commission unveiled the Carbon Border Adjustment Mechanism (CBAM) in July 2021 as part of its "Fit for 55" climate-policy package. The European Commission had announced this trade-policy instrument under the Green Deal in 2019 as a means of implementing more ambitious climate-policy goals without energy-intensive sectors transferring their emissions abroad (carbon leakage). The CBAM proposal envisages imposing a levy on imports in certain energy-intensive European sectors that is proportional to the carbon content of the goods concerned. The proposal complements the EU's existing Emissions Trading System by requiring importers of goods purchased from especially energy-intensive sectors (steel, cement, electricity, fertiliser and aluminium) abroad to purchase carbon certificates based on emissions data from abroad. CBAM is primarily designed to promote an ambitious climate policy for the EU. However, the EU's current proposal creates the impression that...
Sustainable development requires that the climate system be stabilised between 1.5°C and 2°C of a... more Sustainable development requires that the climate system be stabilised between 1.5°C and 2°C of average global warming. This necessitates a drastic reduction in global greenhouse gas emissions. Developing countries and emerging economies are increasingly the focus here. These nations already account for two-thirds of global emissions.<br>Failure to achieve the goals of the Paris Agreement would ultimately undermine the achievement of just and sustainable global development that leaves no one behind. A development-oriented strategy that achieves the necessary reduction in emissions requires both climate change mitigation and development cooperation across policy fields. Tackling the now unavoidable impacts of climate change must also include matters related to land use, marine conservation and global trade. <br>The Paris Agreement and the 2030 Agenda for Sustainable Development provide the necessary objectives and normative foundation for political action. Consistently im...
Das vorliegende Papier stellt NDC-SDG Connections vor und diskutiert den thematischen Beitrag von... more Das vorliegende Papier stellt NDC-SDG Connections vor und diskutiert den thematischen Beitrag von Klimamaßnahmen zur Agenda 2030 für nachhaltige Entwicklung und beleuchtet Möglichkeiten für eine thematisch komplementäre Umsetzung beider Agenden.
The availability of trade finance can be an important driver for international trade. This paper ... more The availability of trade finance can be an important driver for international trade. This paper analyses the effect of trade finance on the trade flows of industrialized, emerging and developing economies and focuses in particular on the role of trade openness. We use Berne Union data on export credit insurance, the most extensive dataset on trade finance currently available, for the period 2005-2013.Using a two-stage instrumentation approach, we find a significantly positive effect of the availability of trade finance on trade. A one per cent increase in commitments is followed by a 0.27-0.54 per cent increase in total imports in the next year. This is a rather large effect and underlines the importance of trade financing for the smooth exchange of goods across countries and regions. Moreover, we find that trade openness is a very important determinant, not only of import flows but also of how trade credit insurance impacts on trade flows. The more open a country is to trade, the ...
Creating intergovernmental environmental clubs is a prominent policy proposal for addressing glob... more Creating intergovernmental environmental clubs is a prominent policy proposal for addressing global environmental problems. According to their proponents, environmental clubs provide an incentive to join them and accept their environmental obligations by generating exclusive “club goods” for their members. Yet, the existing literature considers environmental clubs as a theoretical idea that still has to be put into practice. This article asks whether, in fact, the numerous international environmental agreements (IEAs) containing trade-related provisions provide club goods to their parties. It does so by investigating the effects of these provisions on trade flows among parties compared to flows with non-parties. We introduce an original dataset on 48 types of trade provisions in 2,097 IEAs that we make available with the publication of this article. Based on this new data and a panel of worldwide bilateral trade flows, we find evidence that existing IEAs and their trade-liberalizing...
This study explores to what extent the COVID-19 crisis affects the long-term prospects for indust... more This study explores to what extent the COVID-19 crisis affects the long-term prospects for industrial development. The focus of the study is on latecomer economies – those facing an uphill battle because they joined global markets at a point in time when other economies had already established global production networks.<br>In a first step, we analyse how the prospects for industrialisation are changing, mainly as a consequence of three global megatrends: digitalisation and automation of production; global economic power shifts; and the greening of economies. These trends create new opportunities for latecomer industrialisation, but they also raise entry barriers to markets, especially for country with weak innovation systems.<br>We then explore COVID-19 effects through the analytical lens of the pre-COVID megatrends. While the pandemic has had a severe impact on the world economy, such impacts will not change the ongoing trends fundamentally. The ongoing recovery from C...
The European Commission unveiled the Carbon Border Adjustment Mechanism (CBAM) in July 2021 as pa... more The European Commission unveiled the Carbon Border Adjustment Mechanism (CBAM) in July 2021 as part of its "Fit for 55" climate-policy package. The European Commission had announced this trade-policy instrument under the Green Deal in 2019 as a means of implementing more ambitious climate-policy goals without energy-intensive sectors transferring their emissions abroad (carbon leakage). The CBAM proposal envisages imposing a levy on imports in certain energy-intensive European sectors that is proportional to the carbon content of the goods concerned. The proposal complements the EU's existing Emissions Trading System by requiring importers of goods purchased from especially energy-intensive sectors (steel, cement, electricity, fertiliser and aluminium) abroad to purchase carbon certificates based on emissions data from abroad. CBAM is primarily designed to promote an ambitious climate policy for the EU. However, the EU's current proposal creates the impression that...
Sustainable development requires that the climate system be stabilised between 1.5°C and 2°C of a... more Sustainable development requires that the climate system be stabilised between 1.5°C and 2°C of average global warming. This necessitates a drastic reduction in global greenhouse gas emissions. Developing countries and emerging economies are increasingly the focus here. These nations already account for two-thirds of global emissions.<br>Failure to achieve the goals of the Paris Agreement would ultimately undermine the achievement of just and sustainable global development that leaves no one behind. A development-oriented strategy that achieves the necessary reduction in emissions requires both climate change mitigation and development cooperation across policy fields. Tackling the now unavoidable impacts of climate change must also include matters related to land use, marine conservation and global trade. <br>The Paris Agreement and the 2030 Agenda for Sustainable Development provide the necessary objectives and normative foundation for political action. Consistently im...
Das vorliegende Papier stellt NDC-SDG Connections vor und diskutiert den thematischen Beitrag von... more Das vorliegende Papier stellt NDC-SDG Connections vor und diskutiert den thematischen Beitrag von Klimamaßnahmen zur Agenda 2030 für nachhaltige Entwicklung und beleuchtet Möglichkeiten für eine thematisch komplementäre Umsetzung beider Agenden.
The availability of trade finance can be an important driver for international trade. This paper ... more The availability of trade finance can be an important driver for international trade. This paper analyses the effect of trade finance on the trade flows of industrialized, emerging and developing economies and focuses in particular on the role of trade openness. We use Berne Union data on export credit insurance, the most extensive dataset on trade finance currently available, for the period 2005-2013.Using a two-stage instrumentation approach, we find a significantly positive effect of the availability of trade finance on trade. A one per cent increase in commitments is followed by a 0.27-0.54 per cent increase in total imports in the next year. This is a rather large effect and underlines the importance of trade financing for the smooth exchange of goods across countries and regions. Moreover, we find that trade openness is a very important determinant, not only of import flows but also of how trade credit insurance impacts on trade flows. The more open a country is to trade, the ...
The momentum of urbanization and its impacts are so massive that we must face up to this trend. I... more The momentum of urbanization and its impacts are so massive that we must face up to this trend. In view of the existing cognitive, technical, economic and institutional path dependencies, a policy of business as usual – i.e. an unstructured, quasi-automatic urbanization – would lead to a non-sustainable ‘world cities society’. Only if cities and urban societies are sufficiently empowered can they make use of the opportunities for sustainability and successfully follow the urban transformation pathways. The success or failure of the Great Transformation will be decided in the cities. The WBGU discusses the relevant conditions for the success of this transformation in this report.
Palm oil production is currently the focus of contentious debate. On the one hand, it yields posi... more Palm oil production is currently the focus of contentious debate. On the one hand, it yields positive socio-economic impacts and can be a powerful engine for rural development. On the other hand, it can generate severe negative impacts regarding ecological and social sustainability. Sustainability concerns have spurred numerous efforts to introduce standards and certification schemes for palm oil, including ISPO (Indonesian Sustainable Palm Oil) and RSPO (Roundtable on Sustainable Palm Oil). Yet, potential large-scale ecological benefits of sustainability standards concerning reduced deforestation and greenhouse gas emissions are difficult to achieve. In order to make the palm oil sector more sustainable, it is essential to include the important group of smallholders in certification schemes. At the same time, smallholder certification is especially challenging as it demands capacities that smallholders often lack.
This study presents findings from a research project on sustainability standards for smallholders in the Indonesian palm oil sector – focusing on the challenges and gaps of smallholder certification and the benefits that can be gained. It offers baseline data on smallholder certification, insights into and lessons-learnt from ongoing certification projects and input for closing existing research gaps, especially regarding challenges on the ground.
The international community has acknowledged that international trade can be an effective means o... more The international community has acknowledged that international trade can be an effective means of helping to achieve the 2030 Agenda for Sustainable Development and its 17 Sustainable Development Goals (SDGs). Traditionally, preferential trade agreements (PTAs) were designed to promote trade flows. PTAs have become more comprehensive and now also cover non-economic policy areas, such as the environment. This chapter examines whether the inclusion of environmental provisions in PTAs changes the observed overall positive contribution that PTAs make to economic outcomes and thereby to the economic objectives of the SDGs. Specifically, we ask whether the inclusion of environmental provisions in PTAs reduces export flows between PTA partner countries. Using a novel data set on environmental provisions in PTAs, we estimate gravity type panel regressions. We find that membership in PTAs including more environmental provisions is associated with less trade among trade partners compared to PTAs that include less or no environmental provisions. This negative effect of environmental provisions is fully driven by the negative effect on South-North trade flows, i.e. exports from developing to high-income countries.
The Language of World Trade Politics - Unpacking the Terms of Trade, 2018
While there is lively debate in normative theory and political philosophy about what makes trade ... more While there is lively debate in normative theory and political philosophy about what makes trade ‘just’, the use of normative arguments and concepts has hardly been explored in practice. To address this gap, this chapter empirically investigates what statements about procedural and substantive notions of justice made in the normative literature are made in the world trade regime. It also assesses who actually makes what kinds of arguments – i.e. how meaning makers use the term – and how the discursive dynamics regarding justice are evolving.
Preferential trade agreements (PTAs) cover a much wider diversity of environmental clauses than W... more Preferential trade agreements (PTAs) cover a much wider diversity of environmental clauses than World Trade Organization (WTO) agreements. Which PTA environmental clauses could be multilateralized and included in the WTO rulebook? This chapter compares five different scenarios for the potential multilateralization of PTA environmental clauses: 1) The " routine scenario " combines the most frequent clauses; 2) Tthe " consensual scenario " includes the clauses accepted by a high number of WTO members; 3) the " trendy scenario " includes the most popular clauses in recent times; 4) " the power-game scenario " combines the clauses that are jointly supported by the US and the EU; 5) the " appropriate scenario " is a compilation of the clauses typically included in large membership agreements. This chapter compares and contrasts the scenarios' implications and identifies their common ground. Although each scenario represents an ideal type unlikely to materialize, the comparison offers insights into how the multilateral trade system could be developed to improve the integration of environmental concerns. A. Introduction As part of the trend to establish deeper trade agreements (Dür, Baccini and Elsig 2014), recent preferential trade agreements (PTAs) now incorporate an increasing number of environmental provisions. Several recent PTAs devote an entire chapter to environmental protection and address a broad range of environmental issues, such as endangered species, climate change, hazardous waste and fisheries. Some of these clauses are even more specific and restrictive than those found in multilateral environmental agreements (MEAs) (Morin and Jinnah 2018). The WTO approach to environmental protection looks outdated (OECD 2007) in comparison with PTAs and their ambitious environmental clauses. Several analysts consider PTAs as laboratories where negotiators can experiment and promoted new provision before eventually cemented them at the multilateral level if they become consensual (Baldwin and Low 2009). The concept of multilateralization refers to the adoption of an agreement that incorporates provisions already found in some PTAs. 1 The multilateralization of environmental provisions can take the form of a fully-fledged multilateral agreement that includes all WTO members or a plurilateral agreement among several WTO members. The multilateralization of PTA environmental clauses would enable the WTO to catch up with legal developments that have been tested at the PTA level. At the moment, the multilateralization of PTA environmental clauses appears unlikely, at least in the foreseeable future given the current political and institutional stalemate at the 1 Unlike other studies (Pauwelyn 2009; Morin 2009; Baldwin, Evenett and Low 2009), this chapter does not consider the following to be examples of multilateralization: the geographical expansion of existing PTAs, the creation of mega-regional PTAs, the duplication of certain provisions in a large number of PTAs, the establishment of customary international rules by repeated PTA practice, the citation of PTA clauses in multilateral tribunals and the prohibition of discrimination toward third parties via PTAs.
Preferential trade agreements (PTAs) increasingly include environmental provisions. While the exi... more Preferential trade agreements (PTAs) increasingly include environmental provisions. While the existing literature documents these provisions' environmental impacts, this paper sheds light on their relation with aid flows. Using an event-specification and data on bilateral Official Development Assistance (ODA) commitments for a sample of 147 developing country recipients in the period from 2002-2017, we find evidence that the number of environmental provisions in PTAs is positively associated with aid during negotiation phases. With high-income countries typically predetermining the extent of environmental provisions in their upcoming PTAs, this suggests that aid serves as a side-payment for recipients to sweeten the pot and agree upon already formulated PTA content. While both aggregate ODA and its subcomponent environmental aid a priori qualify as candidates for pre-signature sidepayments, we find that only the former fulfills this expectation, presumably reflecting more leeway to exploit aid fungibility.
This paper investigates linkages between trade and climate policies by examining commitments made... more This paper investigates linkages between trade and climate policies by examining commitments made in preferential trade agreements (PTAs) and Nationally Determined Contributions (NDCs) under the Paris Agreement. While environmental protection and economic growth are often perceived as conflicting policy goals, PTAs and NDCs have the potential to encourage mutually supportive approaches to climate and trade governance. Building upon three recent datasets, the paper locates a sample of 21 countries in a typology of four issue-linkage strategies across both types of instruments: policy integration, policy silos, asymmetry in favor of trade policy, and asymmetry in favor of climate policy. It finds that countries that reveal a preference for strong linkage with climate in their PTAs typically do not reveal a preference for strong trade linkage in their NDCs, and vice versa. No state from the sample favors strong policy integration. After sketching out possible explanations for this observation, the paper concludes that policy-makers have significant room for enhancing synergies between trade and climate commitments and that scholars have a role to play in this endeavor.
Environmental provisions in preferential trade agreements (PTAs) are increasing in terms of their... more Environmental provisions in preferential trade agreements (PTAs) are increasing in terms of their number and variety. The economic effects of these environmental provisions remain largely unclear. It is, therefore, necessary to determine whether the trend to incorporate environmental provisions in PTAs counteracts the goal to spur economic development through trade via these PTAs. This is the first article in which the trade effects of environmental provisions in PTAs are thoroughly investigated. The spotlight is put on developing countries for which the assumed trade-off between economic development and environmental protection is particularly acute. This article uses a new fine-grained dataset on a broad range of environmental provisions in 680 PTAs, combined with a panel of worldwide bilateral trade flows from 1984 to 2016. We show that environmental provisions can help reduce dirty exports and increase green exports from developing countries. This effect is particularly pronounced in developing countries with stringent environmental regulations. By investigating how environmental provisions in PTAs affect trade flows, this article contributes to the literature on the following topics: international trade and the environment; design and impacts of trade agreements; and greening the economy in developing countries. It also shows that the design of trade agreements matters. Environmental provisions can be used as targeted policy tools to promote the green transformation and to leverage synergies between the economic and environmental effects of including environmental provisions in trade agreements.
The increasing uptake of environmental provisions in preferential trade agreements (PTAs) is well... more The increasing uptake of environmental provisions in preferential trade agreements (PTAs) is well documented, but little is known about why countries prefer certain types of provisions over others. Exploiting a fine-grained dataset on environmental provisions in PTAs and hypothesizing that environmental provisions are more likely to be adopted when they aim at preserving countries' regulatory sovereignty, the likelihood of adoption is indeed higher for defensive provisions, but this likelihood decreases if there is a large variation in PTA members' stringency of environmental regulations, and in particular, for PTAs with asymmetric power relationships. While countries first and foremost attempt to preserve their regulatory sovereignty when adopting environmental provisions, countries with stringent environmental regulations and strong bargaining power vis-à-vis their trading partners also try to level the playing field and pursue more offensive interests.
While thousands of environment-related treaties have been concluded, it remains unclear whether t... more While thousands of environment-related treaties have been concluded, it remains unclear whether they have been implemented. This paper investigates the relationship between the conclusion of treaties, namely international environmental agreements (IEAs) and preferential trade agreements (PTAs) that include environmental provisions, and the adoption of domestic environmental legislations. Thanks to datasets that are significantly more comprehensive and fine-grained than those previously used, we can focus on the direct link to environmental legislations rather than the less direct link to environmental outcomes. We are also able to study the relationship between international obligations on specific environmental issue areas and legislation in the same issue areas. As expected, we find a significant and positive relationship between both IEAs and PTAs with domestic legislation. Moreover, the link between treaties and domestic legislation is more pronounced in developing countries and, in these countries, more pronounced before rather than after entry into force. This relationship can be observed for many specific environmental issue areas, but not all of them. These findings contribute to the literature on environmental regime effectiveness and the domestic impact of treaties.
An increasingly comprehensive set of environmental provisions is being integrated in preferential... more An increasingly comprehensive set of environmental provisions is being integrated in preferential trade agreements (PTAs). Interestingly, while a number of these environmental provisions are included only rarely, others are duplicated in more than 100 PTAs. We still lack a convincing explanation for the conditions that fuel the uptake of specific provisions. This paper contributes to the growing literature on the design, interaction, and diffusion of international institutions and introduces two key innovations. First, our level of analysis is the provision level rather than the agreement level. Second, while the diffusion literature typically tries to explain how diffusion occurs, we investigate what makes diffusion more likely. We hypothesise that the initial conditions – relating both to agency and institutional factors – under which provisions first emerge determine the scope of their diffusion. Our results indicate that provisions originating from intercontinental agreements diffuse more often, and provisions first introduced by environmentally credible countries are more frequently duplicated than provisions introduced by economically powerful countries.
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Papers by Clara Brandi
This study presents findings from a research project on sustainability standards for smallholders in the Indonesian palm oil sector – focusing on the challenges and gaps of smallholder certification and the benefits that can be gained. It offers baseline data on smallholder certification, insights into and lessons-learnt from ongoing certification projects and input for closing existing research gaps, especially regarding challenges on the ground.
spotlight is put on developing countries for which the assumed trade-off between economic development and environmental protection is particularly acute. This article uses a new fine-grained dataset on a broad range of environmental provisions in 680 PTAs, combined with a panel of worldwide bilateral trade flows from 1984 to 2016. We show that environmental provisions can help reduce dirty exports and increase green exports from developing countries. This effect is particularly pronounced in developing countries with stringent environmental regulations. By investigating how environmental provisions in PTAs affect trade flows, this article contributes to the literature on the following topics: international trade and the environment; design and impacts of trade agreements; and greening the economy in developing countries. It also shows that the design of trade agreements matters. Environmental provisions can be used as targeted policy tools to promote the green transformation and to leverage synergies between the economic and environmental effects of including environmental provisions in trade agreements.