Trade in CSGTs

In response to the current long-term global economic downturn, proactive economic measures to promote new industries are necessary. Climate-smart goods and technologies (CSGTs) in particular are receiving considerable attention as a potential source of growth, as on a global scale such growth in environmental goods and services will create huge international business opportunities.

CSGTs are defined broadly as products, components and technologies that tend to have a relatively less adverse impact on climate change (i.e. greenhouse gas emission) in particular and on the environment in general. CSGTs constitute lowcarbon technologies such as solar photovoltaic systems, wind power generation, clean coal technologies and energy-efficient lighting. Trade and investment in CSGTs and climate-smart services have recently received much attention as a triple win scenario where trade, climate and environment, and development all benefit. In China, for example, 5.3% of its RMB4 trillion (about $585 billion) economic stimulus package has been given to an environment-related budget. More recently, the nuclear disaster in Japan has triggered global awareness of the needs to seriously promote CSGTs. The achievement of low-energy consumption is now regarded as a key not only to solving climate-change problems but also to reducing reliance on nuclear power. Outside the Asia-Pacific region, the Government of the United States has introduced a $150 billion, 10-year renewable energy initiative, and the European Union has taken active measures to support the switch to low-emission vehicles.

Global trade in CSGTs is gradually rising. The value of world CSGT exports was around $410 billion in the pre-crisis year of 2008, and exports and imports accounted for about 3% of global trade. Although most CSGT exporters are developed economies, some developing economies are also emerging as important players as will become more evident from the discussion below.