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Title page 1

Contents 1

Abstract 2

1. Introduction 4

2. Climate change mitigation policies in the EU, US, and China and their impacts on trade 5

2.1. EU, US, and China climate policies: Carbon pricing, green subsidies, and regulations 5

2.2. Main elements of EU, US, and China climate policies with impacts on developing countries 7

3. Implications of trade-related climate policies for developing countries 13

3.1. Impacts on traditional sectors 15

3.2. Impacts through green transition sectors 20

3.3. Impacts through prices 25

3.4. Impacts through access to technology 26

4. Conclusion and policy recommendations 27

4.1. Recommendations for developing countries 27

4.2. Recommendations for the EU, US, and China 29

4.3. Support by the international community 29

4.4. Further research 30

References 32

Tables 11

Table 1. List of critical minerals identified as strategic for both the EU and the US economies 11

Table 2. EU mineral demand forecasts in a high demand scenario 21

Table 3. Top countries in strategic critical minerals reserves, (% of global reserve) 21

Figures 12

Figure 1. Chinese BRI engagement in metals and mining sector 12

Figure 2. Main impacts and affected agents of the EU, US, and China climate policies 14

Figure 3. Top 10 developing countries according to economic exposure of fossil fuels to the EU, US, and China policies 16

Figure 4. Developing countries with largest GVC exposure to the EU: Petroleum, Chemical and Non-Metallic Mineral Products (percent of domestic products output) 16

Figure 5. Top 5 and bottom 5 countries in Aggregate Relative CBAM Exposure Index 18

Figure 6. GVC exposure to the EU: Metal products 19

Figure 7. Top 10 developing countries according to their economic exposure to EUDR 19

Figure 8. Global value chain exposure to the EU: Textiles 20

Figure 9. Top 10 developing countries according to economic exposure to impacts of EU, US, and China policies on exports of critical minerals 20

Figure 10. Top 10 developing countries according to economic exposure to impacts of the EU, US, and China policies on EV components exports 23

Figure 11. Top 10 developing countries according to economic exposure to impacts of EU, US, and China policies on battery exports 24

Figure 12. Top 10 developing countries according to economic exposure to impacts of EU, US, and China policies on EV exports 25

Figure 13. Top 10 developing countries according to economic exposure to impacts of EU, US, and China policies on exports of renewable technology and components... 25

Figure 14. Top 10 developing countries largest importers of environmental goods from China 27

초록보기

The three major players in the global economy, the United States, the European Union, and China, have been designing climate mitigation policies that will help reduce their carbon emissions but will also likely reshape developing countries’ trade, prices, and access to technology. This paper examines developing countries’ exposure to such changes.

Overall, the policies are expected to curtail demand for fossil fuels, energy-intensive manufacturing, and agricultural exports linked to environmental degradation. They are also expected to open export opportunities in critical minerals, electric vehicles and their components, and renewable energy technologies and components.

The exposure of affected export sectors and the overall economy to these changes will vary across countries based on the orientation of their export sectors to the markets in the European Union, the United States, and China, as well as the weight of affected exports in their economies.

The climate policies will also likely reduce oil prices and raise critical mineral prices, help reduce the cost of green technologies, and increase green foreign investment.

The paper draws recommendations for developing countries, the European Union, the United States, and China, as well as the international community, on how best to help developing countries lessen the potential negative competitiveness effects of these climate policies and make the most of the opportunities for a faster green transition and economic development.