Clara Brandi

The momentum of urbanization and its impacts are so massive that we must face up to this trend. In view of the existing cognitive, technical, economic and institutional path dependencies, a policy of business as usual – i.e. an unstructured, quasi-automatic urbanization – would lead to a non-sustainable ‘world cities society’. Only if cities and urban societies are sufficiently empowered can they make use of the opportunities for sustainability and successfully follow the urban transformation pathways. The success or failure of the Great Transformation will be decided in the cities. The WBGU discusses the relevant conditions for the success of this transformation in this report.

The international community has acknowledged that international trade can be an effective means of helping to achieve the 2030 Agenda for Sustainable Development and its 17 Sustainable Development Goals (SDGs). Traditionally, preferential trade agreements (PTAs) were designed to promote trade flows. PTAs have become more comprehensive and now also cover non-economic policy areas, such as the environment. This chapter examines whether the inclusion of environmental provisions in PTAs changes the observed overall positive contribution that PTAs make to economic outcomes and thereby to the economic objectives of the SDGs. Specifically, we ask whether the inclusion of environmental provisions in PTAs reduces export flows between PTA partner countries. Using a novel data set on environmental provisions in PTAs, we estimate gravity type panel regressions. We find that membership in PTAs including more environmental provisions is associated with less trade among trade partners compared to PTAs that include less or no environmental provisions. This negative effect of environmental provisions is fully driven by the negative effect on South-North trade flows, i.e. exports from developing to high-income countries.

Preferential trade agreements (PTAs) cover a much wider diversity of environmental clauses than World Trade Organization (WTO) agreements. Which PTA environmental clauses could be multilateralized and included in the WTO rulebook? This chapter compares five different scenarios for the potential multilateralization of PTA environmental clauses: 1) The " routine scenario " combines the most frequent clauses; 2) Tthe " consensual scenario " includes the clauses accepted by a high number of WTO members; 3) the " trendy scenario " includes the most popular clauses in recent times; 4) " the power-game scenario " combines the clauses that are jointly supported by the US and the EU; 5) the " appropriate scenario " is a compilation of the clauses typically included in large membership agreements. This chapter compares and contrasts the scenarios' implications and identifies their common ground. Although each scenario represents an ideal type unlikely to materialize, the comparison offers insights into how the multilateral trade system could be developed to improve the integration of environmental concerns. A. Introduction As part of the trend to establish deeper trade agreements (Dür, Baccini and Elsig 2014), recent preferential trade agreements (PTAs) now incorporate an increasing number of environmental provisions. Several recent PTAs devote an entire chapter to environmental protection and address a broad range of environmental issues, such as endangered species, climate change, hazardous waste and fisheries. Some of these clauses are even more specific and restrictive than those found in multilateral environmental agreements (MEAs) (Morin and Jinnah 2018). The WTO approach to environmental protection looks outdated (OECD 2007) in comparison with PTAs and their ambitious environmental clauses. Several analysts consider PTAs as laboratories where negotiators can experiment and promoted new provision before eventually cemented them at the multilateral level if they become consensual (Baldwin and Low 2009). The concept of multilateralization refers to the adoption of an agreement that incorporates provisions already found in some PTAs. 1 The multilateralization of environmental provisions can take the form of a fully-fledged multilateral agreement that includes all WTO members or a plurilateral agreement among several WTO members. The multilateralization of PTA environmental clauses would enable the WTO to catch up with legal developments that have been tested at the PTA level. At the moment, the multilateralization of PTA environmental clauses appears unlikely, at least in the foreseeable future given the current political and institutional stalemate at the 1 Unlike other studies (Pauwelyn 2009; Morin 2009; Baldwin, Evenett and Low 2009), this chapter does not consider the following to be examples of multilateralization: the geographical expansion of existing PTAs, the creation of mega-regional PTAs, the duplication of certain provisions in a large number of PTAs, the establishment of customary international rules by repeated PTA practice, the citation of PTA clauses in multilateral tribunals and the prohibition of discrimination toward third parties via PTAs.

Preferential trade agreements (PTAs) increasingly include environmental provisions. While the existing literature documents these provisions' environmental impacts, this paper sheds light on their relation with aid flows. Using an event-specification and data on bilateral Official Development Assistance (ODA) commitments for a sample of 147 developing country recipients in the period from 2002-2017, we find evidence that the number of environmental provisions in PTAs is positively associated with aid during negotiation phases. With high-income countries typically predetermining the extent of environmental provisions in their upcoming PTAs, this suggests that aid serves as a side-payment for recipients to sweeten the pot and agree upon already formulated PTA content. While both aggregate ODA and its subcomponent environmental aid a priori qualify as candidates for pre-signature sidepayments, we find that only the former fulfills this expectation, presumably reflecting more leeway to exploit aid fungibility.

This paper investigates linkages between trade and climate policies by examining commitments made in preferential trade agreements (PTAs) and Nationally Determined Contributions (NDCs) under the Paris Agreement. While environmental protection and economic growth are often perceived as conflicting policy goals, PTAs and NDCs have the potential to encourage mutually supportive approaches to climate and trade governance. Building upon three recent datasets, the paper locates a sample of 21 countries in a typology of four issue-linkage strategies across both types of instruments: policy integration, policy silos, asymmetry in favor of trade policy, and asymmetry in favor of climate policy. It finds that countries that reveal a preference for strong linkage with climate in their PTAs typically do not reveal a preference for strong trade linkage in their NDCs, and vice versa. No state from the sample favors strong policy integration. After sketching out possible explanations for this observation, the paper concludes that policy-makers have significant room for enhancing synergies between trade and climate commitments and that scholars have a role to play in this endeavor.

Environmental provisions in preferential trade agreements (PTAs) are increasing in terms of their number and variety. The economic effects of these environmental provisions remain largely unclear. It is, therefore, necessary to determine whether the trend to incorporate environmental provisions in PTAs counteracts the goal to spur economic development through trade via these PTAs. This is the first article in which the trade effects of environmental provisions in PTAs are thoroughly investigated. The
spotlight is put on developing countries for which the assumed trade-off between economic development and environmental protection is particularly acute. This article uses a new fine-grained dataset on a broad range of environmental provisions in 680 PTAs, combined with a panel of worldwide bilateral trade flows from 1984 to 2016. We show that environmental provisions can help reduce dirty exports and increase green exports from developing countries. This effect is particularly pronounced in developing countries with stringent environmental regulations. By investigating how environmental provisions in PTAs affect trade flows, this article contributes to the literature on the following topics: international trade and the environment; design and impacts of trade agreements; and greening the economy in developing countries. It also shows that the design of trade agreements matters. Environmental provisions can be used as targeted policy tools to promote the green transformation and to leverage synergies between the economic and environmental effects of including environmental provisions in trade agreements.

The increasing uptake of environmental provisions in preferential trade agreements (PTAs) is well documented, but little is known about why countries prefer certain types of provisions over others. Exploiting a fine-grained dataset on environmental provisions in PTAs and hypothesizing that environmental provisions are more likely to be adopted when they aim at preserving countries' regulatory sovereignty, the likelihood of adoption is indeed higher for defensive provisions, but this likelihood decreases if there is a large variation in PTA members' stringency of environmental regulations, and in particular, for PTAs with asymmetric power relationships. While countries first and foremost attempt to preserve their regulatory sovereignty when adopting environmental provisions, countries with stringent environmental regulations and strong bargaining power vis-à-vis their trading partners also try to level the playing field and pursue more offensive interests.

While thousands of environment-related treaties have been concluded, it remains unclear whether they have been implemented. This paper investigates the relationship between the conclusion of treaties, namely international environmental agreements (IEAs) and preferential trade agreements (PTAs) that include environmental provisions, and the adoption of domestic environmental legislations. Thanks to datasets that are significantly more comprehensive and fine-grained than those previously used, we can focus on the direct link to environmental legislations rather than the less direct link to environmental outcomes. We are also able to study the relationship between international obligations on specific environmental issue areas and legislation in the same issue areas. As expected, we find a significant and positive relationship between both IEAs and PTAs with domestic legislation. Moreover, the link between treaties and domestic legislation is more pronounced in developing countries and, in these countries, more pronounced before rather than after entry into force. This relationship can be observed for many specific environmental issue areas, but not all of them. These findings contribute to the literature on environmental regime effectiveness and the domestic impact of treaties.

An increasingly comprehensive set of environmental provisions is being integrated in preferential trade agreements (PTAs). Interestingly, while a number of these environmental provisions are included only rarely, others are duplicated in more than 100 PTAs. We still lack a convincing explanation for the conditions that fuel the uptake of specific provisions. This paper contributes to the growing literature on the design, interaction, and diffusion of international institutions and introduces two key innovations. First, our level of analysis is the provision level rather than the agreement level. Second, while the diffusion literature typically tries to explain how diffusion occurs, we investigate what makes diffusion more likely. We hypothesise that the initial conditions – relating both to agency and institutional factors – under which provisions first emerge determine the scope of their diffusion. Our results indicate that provisions originating from intercontinental agreements diffuse more often, and provisions first introduced by environmentally credible countries are more frequently duplicated than provisions introduced by economically powerful countries.