It was held on the sidelines of the 64th Sessions of the UNFCCC Subsidiary Bodies (SB64), also known as the Bonn Climate Change Conference.
- The dialogue was created in response to concerns from developing nations about the increasing use of trade-related climate measures and their potential impacts.
Trade Measures Linked to Climate Change:
- Unilateral Measures: Eg: Carbon Border Adjustment Mechanism (CBAM) of the EU targets energy-intensive sectors that are highly vulnerable to carbon leakage.
- Green Subsidies: Eg: U.S. Inflation Reduction Act designed to stimulate domestic clean energy production.
- Non-Tariff Measures (NTMs): such as mandatory Corporate Sustainability Due Diligence, Digital Product Passports, and anti-deforestation laws of the EU.
Impact on Developing Countries
- Economic Burden: Such measures act as trade barriers, creating severe compliance costs and market access restrictions for developing economies.
- Disproportionate Sectoral Impacts: Such as EU’s CBAM heavily impacts critical export sectors like aluminum, iron, steel, cement, and fertilizers.
- Threat to Structural Transformation: Trade barriers threaten their industrialization and risk locking them into low-value, extractive roles in the new green economy.
Other Areas of Differences between developed and developing nations:
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