David's Blog on SOM3 Beijing - Post 4

August 16, 2014

New Forum Created: Public Private Partnership on Environmental Goods and Services (PPEGS)
Among several new fora created and inaugurated by APEC this week, the PPEGS may have an interesting role to play. But first, one has to wrestle with confusions over acronyms. This is not a PPFS or a PPSTI, or a PPWE. Let’s unscramble.
These last three are “Policy Partnerships” – on Food Security (PPFS), Science Technology and Innovation (PPSTI) and Women in the Economy (PPWE). But this new forum is a Public Private Partnership  – not a Policy Partnership - on Environmental Goods and Services.
The difference is of course as clear as mud. All are efforts to bring the private sector to the table to meet with, and give practical advice to APEC officials. But PPEGS seems to seek no formal place for business executives at the table. It is organizing events – like this week’s Public Private Dialogue on Renewable and Clean Energy Trade and Investment – to pick brains in the private sector, but to do so informally and ad hoc. This was the inaugural Dialogue. The next will not be on Clean Energy, but on some other aspect of developing trade and investment in Environmental Goods and Services. Watch this space.
Irony aside, the session was valuable, with a number of strong and educative presentations on clean energy initiatives around the region – though going forward ABAC must wrestle with how it best engages with this new PP on behalf of business. For me, three main issues arose that are likely to challenge us:
  • First, environmental issues are not tidily dealt with across the dozens of APEC Working Groups. They are tackled ad hoc in many different working groups. That means there is going to be a big challenge in deciding how the PPEGS links with other working groups without duplicating everything.

  • Second, the barriers to effective trade and investment in environmental goods and services all seem to be behind, rather than at, the border. They are all to do with licences and standards and the like. This means a group like the PPEGS could be a real champion for all of those “next generation” behind-the-border challenges that have for so long proven so tricky to deal with.

  • Third, particularly in an area like clean energy, discussions run immediately into complicated and emotional debates over subsidies. Of course, in the WTO as well as in most tree trade agreements, subsidies are seen as bad. They are seen as weasel ways to support local champion industries, and act as barriers to free trade. But in clean energy, subsidies are clearly going for the foreseeable future to be pivotal in levelling the competitive playing field against traditional carbon-heavy power generators, which can provide cheap power mainly because the awful environmental costs linked with CO2 emissions are not properly priced in. If subsidies are going to be pivotal in facilitating a shift to low-carbon power generation, then PPEGS can play a valuable role in forging region-wide agreement on which subsidies are legitimate, and which are not. Strikes me as a valuable theme for a future PPEGS.

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