Development, trade and carbon reduction: designing coexistence to promote development

The impact of climate change will impose new costs on developing country exporters, especially if markets do not work correctly and international agreements are not well designed. If the costs of carbon emissions are priced correctly, then markets could ensure that emissions are reduced in the most efficient ways. Internationally agreed and administered rules are needed for both trade and climate change, as the actions of one country can damage the interests of others and because coordinated action can improve the outcomes for all. These papers explore three ways of helping developing countries and the international system deal with the new problems: aid to meet the additional costs, new markets in carbon reduction commitments, and reconciling the differences between the world trading system and the international conventions on climate change.