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The author argues that SILDEs appear relatively better prepared to cope with the challenges of climate change than many larger developing countries. Nevertheless, they still face a number of critical challenges, particularly in the context of the structural and policy constraints imposed by their economic characteristics and capacity for resilience. The paper concludes that building that resilience to growth volatility and external shocks, including the impact of climate change, requires appropriate trade policies alongside measures to stabilise earnings and strategic import dependence. It is also crucial to develop the capacities of SILDEs to diversify production, enhance productivity and add value to exports. This requires indigenous capacities to innovate and develop new technologies; it also requires the absorption of adaptation and mitigation technologies.

In today’s interconnected world, trade policy and international regulatory frameworks are likely to determine decisions on allocation and use of resources. In this context, there are at least two dimensions in which climate change interfaces with trade policy that are relevant to poverty. On the one hand, as climate changes are expected to alter productivity in important economic sectors and to stress existing infrastructure, trade policy needs to be managed in a way that enables, rather than hampers, the necessary responses to adjust and adapt, that favour in particular the poor. On the other hand, policy responses to climate change should be crafted and implemented in ways that preclude perverse impacts on growth opportunities of developing countries, including on trade-driven sectors of the economy relevant to the poor.

This ICTSD roundtable discussion, which forms part of the Geneva Roundtables Series on Climate Change, Trade and Development 2010-2011, will first explore the inter-linkages between trade, poverty and climate change, in order to support well-informed policy responses in these areas. Then, particular focus will be lent to issues of financing, including a look at how to make climate change financing and aid for trade complementary and mutually reinforcing, which is crucial to addressing the climate change adaptation needs and specific supply-side constrain of developing countries.

This paper explores how climate change financing and aid for trade can address the climate change adaptation needs and specific supply-side constraints of African LDCs and small, vulnerable economies (SVEs) in a complementary and supportive manner.

The paper concludes that to make climate change financing and aid for trade complementary and mutually reinforcing, both African countries and donors need to recognize and specify the trade impacts of National Adaptation Plans of Action (NAPAs) projects and the climate change implications of aid for trade projects. Moreover, the analysis highlights that both NAPAs and Poverty Reduction Strategy Papers (PRSPs) should be closely linked when designed, funded and implemented. A great deal of coherence will thus be required among African governments, private sector actors, members of civil society, and donors.

Although the total size of the development assistance from these donors is still small in comparison to the traditional donors’ aid, its role is growing rapidly. Geographical proximity is a major determinant of the direction of most aid flows from the emerging economies. This pattern is mainly motivated by language and cultural similarities and opportunities for increasing trade and strengthening political relations. However, geographical proximity is not the only determinant, and southern donors, particularly China and India, are strengthening their ties with Africa as well as other developing countries. Development assistance is by no means the principal ingredient in South-South cooperation. Indeed, the latter is also largely made of trade and investment, tourism, and peace-keeping operations. Nonetheless, it is the most important element as it is used to facilitate the other flows.

The present Issue Paper challenges the perception that non-traditional aid lacks transparency and contains little or any conditionality thereby undermining the development efforts of ‘traditional’ donors. Moreover, this  paper examines the implications of the re-emergence of China, India, Brazil and South Africa as important ‘non-traditional’ donors to Africa on sustainable development and aid flows and governance.

Climate change forecasts suggest that the Caribbean is particularly vulnerable to the impact of global warming. Tourism and other key economic sectors such as fisheries and agriculture will be major impact-takers under climate change. To make those economies more resilient to climate change impacts and other exogenous shocks both mitigation and adaptation measures will have to be pursued in the tourism sector. Mitigation actions could reduce energy consumption by improving energy efficiency, increasing the use of renewable energy, and implementing carbon-offsetting strategies. Moreover, given the great interest and increasing demand for sustainable and eco-tourism, new business opportunities could emerge.

The present Issue Paper “Resilience Amidst Rising Tides” by Keron Niles, a Research Consultant, aims to deepen our understanding of the key mitigation and adaptation challenges the tourism sector faces in the Caribbean. Moreover, the study explores the issues at the interface of trade, climate change, and sustainable development of concern and interests to Caribbean countries, with a focus on the competitiveness of the tourism sector. Indeed, trade policy has an important role to play in this context. Niles argues that through the potential liberalisation of environmental goods and services (EGS), a few climate friendly technologies could be made available to decrease the Caribbean’s collective carbon footprint. Moreover, environmental services geared to reduce climate change vulnerability and foster resilience could be both imported and exported at the regional and international level.

Ultimately, the purpose of this paper is to foster an informed discussion among governments, private sector and civil society in order to search for plausible ways to address adaptation and mitigation challenges in the tourism sector and build resilience in the Caribbean.

En 2007, la industria textil y vestuario exportadora nicaragüense, empleó al 5% de la Población Económicamente Activa (PEA) del país entre 15 y 69 años, sin incluir los puestos de trabajo generados por las micro, pequeñas y medianas empresas nacionales que producen para el mercado interno, así como los creados por unidades de negocio de tipo informal.

En Nicaragua, el sector textil y confección está conformado por microempresas formales (81%), empresas de zona franca (19%) y algunas empresas medianas. Sin embargo, las empresas de zona franca generan el 99.4% de las exportaciones del sector. Actualmente, setenta y dos empresas grandes exportan en su mayoría “paquete completo”, 337 microempresas formales producen para el mercado local y existen cientos de empresas informales.

No obstante, la desconexión entre el sector exportador y las pequeñas y medianas empresas (PYMEs) ha limitado los encadenamientos productivos, así como la creación de clusters donde, entre otras cosas, se fomente la innovación y el valor agregado. Adicionalmente, la inexistencia de un puerto en el Atlántico y la falta de abastecimiento de accesorios y servicios en  Nicaragua, restan competitividad al sector.

El presente estudio realizado por Ana Victoria Portocarrero, del Instituto de Investigación Aplicada y Desarrollo Local NITLAPAN, provee un diagnóstico exhaustivo del sector textil y confección en Nicaragua desde una perspectiva de desarrollo sostenible. Dicho estudio fungió como insumo para la identificación de estrategias de reconversión del sector textil y confección en Nicaragua por parte de Eduardo Burga, publicadas en un estudio por el ICTSD como parte de este proyecto.

El análisis concluye que para lograr una reconversión del sector textil y confección en Nicaragua desde una visión de desarrollo sostenible una serie de políticas sociales, económicas y ambientales deberán ser dirigidas para desarrollar, entre otras cosas, capacidades del lado de la oferta, promover los encadenamientos productivos entre el capital micro, pequeño, mediano y grande, fomentar el valor de la producción, mejorar las condiciones laborales y ambientales y fortalecer el conocimiento y las capacidades técnicas de las y los trabajadores del sector textil y confección.

Actualmente algunas iniciativas de producción orgánica y más limpia, así como ejemplos puntuales pero innovadores en cuanto a marcos de cooperación entre PYMEs y empresas exportadoras, podrían guiar la discusión sobre nuevos y diversos caminos hacia una reconversión del sector que tome en cuenta los actuales desafíos económicos, sociales y ambientales en el marco de una estrategia de desarrollo nacional y regional a largo plazo.

En Guatemala, el sector textil y confección cuenta con una importante participación del capital nacional y extranjero. No obstante, esta industria experimenta una alta concentración de mercado dado que el 88% de las exportaciones tienen como destino los EE.UU, así como la presencia de dos subsectores: uno enfocado en la producción nacional formado por pequeñas y medianas empresas (PYMEs) y otro volcado hacia las exportaciones formado por empresas grandes.

Aunque ambos sectores se relacionan de manera directa e indirecta, no existen políticas que fomenten los encadenamientos productivos o clusters en donde se fomente el intercambio de conocimientos, la innovación, la transferencia tecnológica, entre otros. Por otro lado, los altos costos de la energía eléctrica, los problemas de seguridad en el país, así como el contrabando afectan de manera directa a ambos subsectores. En el marco de la crisis económica global y las presiones competitivas de los países asiáticos, el sector textil y confección guatemalteco deberá generar estrategias de reconversión a fin de sortear los actuales desafíos económicos, sociales y ambientales que enfrenta el sector y el país.

El presente estudio realizado por Pedro Prado, Violeta Hernández, Marcelo Coj, Italia Pineda y Erick Ventura, de la Asociación de Investigación y Estudios Sociales (ASIES) y el Instituto de Investigaciones Económicas y Sociales (IDIES), provee una caracterización del sector textil y confección guatemalteco desde una perspectiva de desarrollo sostenible. Al igual que en el caso de Nicaragua, dicho diagnóstico fungió como insumo para la identificación de estrategias de reconversión del sector textil y confección en Nicaragua por parte de Eduardo Burga, publicadas en un estudio por el ICTSD como parte de este proyecto.

De este análisis se destila que Guatemala cuenta con una serie de capacidades productivas, académicas y empresariales establecidas para avanzar de manera más significativa hacia una producción de paquete completo o paquete rápido (menor volumen, mayor rapidez en la entrega) que genere importantes encadenamientos con el capital nacional pequeño, mediano y grande, continúe el fomento a la producción de tejido de punto que requiere de conocimiento y maquinaria más sofisticadas e integre en su quehacer una visión de desarrollo sostenible. El rol del estado, el sector privado y la sociedad civil será crucial para asegurar una reconversión efectiva y sostenible del sector

The purpose of this publication is to deepen the understanding of policy-makers and other stakeholders of the major issues and challenges that least developed countries (LDCs), small and vulnerable economies (SVEs) and small island developing states (SIDS) face with respect to the interface between trade and climate change. Previous work in this field has focused largely in the concerns of developed countries and large developing countries such as Brazil, India and China. Yet, for small economies, the inter-relationship between trade and climate change is likely to have significant development implications.

LDCs, SVEs and SIDS are amongst the countries most vulnerable to climate change. Not only do many face amongst the most severe physical impacts from climate change - often in the form of too much water, or too little - but they also have economies that are particularly sensitive to climatic variation, since these are based in the natural environment and dominated by agriculture, fisheries, forestry and tourism. Furthermore, countries in this group are amongst the most open and trade-dependent economies in the world. Many are remote from major markets, being either island or landlocked countries, and face high transportation costs. They also face deep institutional and human resource capacity constraints in formulating and institutionalising effective pre-emptive and response measures to climate change and climate change policies.

The study that this book presents was carried out under the International Centre for Trade and Sustainable Development’s (ICTSD) Global Platform on Climate Change, Trade and Sustainable Energy. It was implemented by the Commonwealth Secretariat in response to the Lake Victoria Commonwealth Climate Change Action Plan, agreed by Commonwealth Heads of Government in Uganda in November 2007.

The study, in draft form, was considered at a Multi-stakeholder Dialogue on Trade and Climate Change: Key Issues for Developing Countries, which was held in Mauritius in September 2008. The meeting was hosted by the Ministry of Finance and Economic Development of Mauritius and involved researchers involved in the project, regional bodies, the private sector and government officials from Africa, the Caribbean and Pacific. There was also strong representation from within Mauritius across a range of sectors. Some of the policy-oriented conclusions drawn out by the stakeholder dialogue are included in this volume. They indicated a rich programme of work that has still to be developed and implemented to address current development concerns of LDCs, SVEs and SIDS in respect to trade and climate change issues.

The papers in this volume comprehensively cover the trade and climate change concerns of LDCs, SVEs and SIDS, looking at the impact of climate change on key trade sectors, including agriculture, fisheries and tourism, and exploring the needs of these most vulnerable countries with respect to transport and access ro clean, efficient and renewable sources of energy for development, and technologies that will support more sustainable forms of production and livelihoods into the future.

The book highlights some of the most immediate concerns of LDCs, SVEs and SIDS in respect of trade and climate change issues, but the implication of the analysis this volume presents is also that there need to be a transformation of trade policy approaches, at the national and international levels, to support a diversification away from trade sectors that are highly vulnerable to climate change, and to better support economic competitiveness, low-carbon development and poverty reduction in the most vulnerable countries in the world.