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Improved toolbox for evaluating the climate and environmental impacts of trade policies
Cluster 5 - Destination 1: Climate sciences and responses for the transformation towards climate neutrality
Estimated EU contribution per project
Link to the call
Link to the submission
Projects should focus on the study and quantification of the effects of trade and trade policy on the climate and the environment.
Actions are expected to cover all of the following areas:
- Study and quantification of the effects of trade on the climate and the environment
- In-depth study/quantification of the technique and composition effects: in addition to the scale effect of increasing production, trade also has an impact on the sector composition of economies and the technologies used for production. The project(s) should quantify and decompose these effects, including their underlying mechanisms/causes.
- Growth projections of trade related emissions in developing countries and newly developed countries: it can be expected that most of future trade-related emissions will take place in these countries. The project(s) should therefore estimate and quantify these future emissions under different scenarios, including the extent to which this is related to pollution offshoring and pollution haven effects.
- Estimate the net effect of trade: clarify/quantify how much of trade related emissions would still take place in the context of the domestic economy without international trade. While trade-related emissions are an important part of total world emissions, not enough is known about the counterfactual, i.e. emissions profiles in the absence of international trade.
- Study the effects stemming from changes in the use of resources attributable to international trade, both in terms of efficiency gains (e.g. in energy and material use) and in terms of changes in the climate impacts associated with production and consumption, and whether externalities are likely to be internalised. For specific sectors, the action should look into emissions linked to the production in different countries versus transport emissions in trade to those countries.
- Study trade-related climate and environmental impacts in key sectors like agriculture and livestock, including linkages to regional land use change, water resources and differences in agricultural production techniques worldwide. Specific tools and methodologies for agriculture and livestock should also be proposed and refined to be able to give sector-specific advice to policy makers.
- Study the public perception vs. the reality of trade impacting on the environment and climate: while in the public debate trade is often associated with increased emissions related to the scale effect, technique and composition effects point to positive impacts in certain cases. Case studies should also include concrete examples of cases where public perception of trade effects on emissions and real effects diverge.
- Study and quantification of the effects of trade policy on the climate and the environment
- In-depth study/quantification of trade creation and trade diversion effects in relation to the climate and the environment: trade liberalisation affects trade flows through the diversion of such flows as well as inducing additional trade. The project(s) should study the net effect of these phenomena on the climate and the environment.
- Impact of environmental/climate regulation on trade and competitiveness: it can be assumed that in some cases tightened environmental legislation can lead to compliance costs and competitiveness effects. It should be empirically studied to what extent this assumption is correct and to what extent the so-called ‘Brussels Effects’ impacts these cost and competitiveness effects.
- What do the expansion of global value chains, offshoring and their fragmentation (and a possible reversal of such trends) mean for the climate and climate-related trade policy: the project(s) should analyse the effectiveness of climate and trade policies in such an international economic context.
- Effects of openness to trade on environmental and climate policy: trade and international exchanges lead to the diffusion of technology and ideas. To what extent do these effects influence emissions and global climate/environmental policies?
- The role of trade policy as a tool to address the free rider problems in climate policies: since addressing climate change is a global public good, free-rider problems persist. To what extend can trade incentives and the trade policy toolbox help overcoming these?
- Analyse the coherence between trade policies, climate policies and other policies such as nutrition-food, resources policies and development policies that affect the impacts on the climate and the environment. Analyse how these policies affect the trade-off between food security and conservation of natural resources (such as forests and water resources).
- Methodology and toolbox related aspects
- Impact of trade and foreign direct investment (FDI) on the productivity of sectors (do more productive sectors/producers tend to be cleaner?): the project(s) should endogenise (Global Trade Analysis Project (GTAP) sector productivity to trade beyond a Melitz-type of framework, including the separation of energy efficiency effects among the productivity effects. Currently since, technological change is mostly exogenous or only roughly calibrated in Computable General Equilibrium (CGE) models, technique effects on carbon leakage cannot fully be captured.
- Impact of trade on land use (overall and composition), in particular on deforestation: the project(s) should study methodologies that can be used to better understand the effects of trade and trade policy on land use. Actions should also create/update a trade induced land use/land use change matrix for GTAP sectors.
- Transport-related pollution: the project(s) should create a transport mode matrix for GTAP sectors per countries and their related emissions.
- Enlarge/split the GTAP sectors list for emission-intensive sectors: the project(s) should create/improve the GTAP sector matrix for emission-intensive sectors.
Actions are also encouraged to explore and promote synergies between the use of modelling approaches in international trade analysis and in comparable macroeconomic modelling in climate policy, for example, in Integrated Assessment Modelling.
International cooperation with research clusters, which have specific knowledge in areas of this call, is encouraged.
The project should also include dissemination and capacity-building for the findings and tools created among policy makers at the EU and Member States/Associated countries level.
Project results are expected to contribute to all of the following outcomes:
- Enhance our knowledge and inform policy makers on the positive and negative impacts of trade and trade policy on the climate. Additionally, where relevant, broader effects on the environment, in particular biodiversity, pollution and natural resources depletion may also be considered.
- Improve and enlarge the toolbox of models and other research techniques as well as available data and its processing to analyse the impact of trade and trade policy on the climate.
Regions / countries for funding
Moldova (Moldova), Albania (Shqipëria), Armenia (Հայաստան), Azerbaijan (Azərbaycan), Belarus (Беларусь), Bosnia and Herzegovina (Bosna i Hercegovina / Босна и Херцеговина), Faeroes (Føroyar / Færøerne), Georgia (საქართველო), Island (Ísland), Israel (ישראל / إِسْرَائِيل), Kosovo (Kosova/Kosovë / Косово), Montenegro (Црна Гора), Morocco (المغرب), New Zealand (Aotearoa), North Macedonia (Северна Македонија), Norway (Norge), Serbia (Srbija/Сpбија), Tunisia (تونس /Tūnis), Türkiye, Ukraine (Україна), United Kingdom
Education and training institution, International organization, Non-Profit Organisation (NPO) / Non-Governmental Organisation (NGO), Other, Private institution, incl. private company (private for profit), Public Body (national, regional and local; incl. EGTCs), Research Institution incl. University, Small and medium-sized enterprise (SME)
To be eligible for funding, applicants must be established in one of the following countries:
- the Member States of the European Union, including their outermost regions
- the Overseas Countries and Territories (OCTs) linked to the Member States
- third countries associated to Horizon Europe - see list of particpating countries
Only legal entities forming a consortium are eligible to participate in actions provided that the consortium includes, as beneficiaries, three legal entities independent from each other and each established in a different country as follows:
- at least one independent legal entity established in a Member State; and
- at least two other independent legal entities, each established in different Member States or Associated Countries.
Any legal entity, regardless of its place of establishment, including legal entities from non-associated third countries or international organisations (including international European research organisations) is eligible to participate (whether it is eligible for funding or not), provided that the conditions laid down in the Horizon Europe Regulation have been met, along with any other conditions laid down in the specific call topic.
A ‘legal entity’ means any natural or legal person created and recognised as such under national law, EU law or international law, which has legal personality and which may, acting in its own name, exercise rights and be subject to obligations, or an entity without legal personality.
- Affiliated entities — Affiliated entities (i.e. entities with a legal or capital link to a beneficiary which participate in the action with similar rights and obligations to the beneficiaries, but which do not sign the grant agreement and therefore do not become beneficiaries themselves) are allowed, if they are eligible for participation and funding.
- Associated partners — Associated partners (i.e. entities which participate in the action without signing the grant agreement, and without the right to charge costs or claim contributions) are allowed, subject to any conditions regarding associated partners set out in the specific call conditions.
- Entities without legal personality — Entities which do not have legal personality under their national law may exceptionally participate, provided that their representatives have the capacity to undertake legal obligations on their behalf, and offer guarantees to protect the EU’s financial interests equivalent to those offered by legal persons.
- EU bodies — Legal entities created under EU law including decentralised agencies may be part of the consortium, unless provided for otherwise in their basic act.
- Joint Research Centre (‘JRC’)— Where provided for in the specific call conditions, applicants may include in their proposals the possible contribution of the JRC but the JRC will not participate in the preparation and submission of the proposal. Applicants will indicate the contribution that the JRC could bring to the project based on the scope of the topic text. After the evaluation process, the JRC and the consortium selected for funding may come to an agreement on the specific terms of the participation of the JRC. If an agreement is found, the JRC may accede to the grant agreement as beneficiary requesting zero funding or participate as an associated partner, and would accede to the consortium as a member.
- Associations and interest groupings — Entities composed of members (e.g. European research infrastructure consortia (ERICs)) may participate as ‘sole beneficiaries’ or ‘beneficiaries without legal personality’. However, if the action is in practice implemented by the individual members, those members should also participate (either as beneficiaries or as affiliated entities, otherwise their costs will NOT be eligible.
other eligibility criteria
If projects use satellite-based earth observation, positioning, navigation and/or related timing data and services, beneficiaries must make use of Copernicus and/or Galileo/EGNOS (other data and services may additionally be used).
Relevance for EU Macro-Region
EUSAIR - EU Strategy for the Adriatic and Ionian Region, EUSALP - EU Strategy for the Alpine Space, EUSBSR - EU Strategy for the Baltic Sea Region, EUSDR - EU Strategy for the Danube Region
UN Sustainable Development Goals (UN-SDGs)
All proposals must be submitted electronically via the Funders & Tenders Portal electronic submission system (accessible via the topic page in the Search Funding & Tenders section). Paper submissions are NOT possible.
Proposals must be complete and contain all parts and mandatory annexes and supporting documents, e.g. plan for the exploitation and dissemination of the results including communication activities, etc.
The application form will have two parts:
- Part A (to be filled in directly online) contains administrative information about the applicant organisations (future coordinator and beneficiaries and affiliated entities), the summarised budget for the proposal and call-specific questions;
- Part B (to be downloaded from the Portal submission system, completed and then assembled and re-uploaded as a PDF in the system) contains the technical description of the project.
Annexes and supporting documents will be directly available in the submission system and must be uploaded as PDF files (or other formats allowed by the system).
The limit for a full application (Part B) is 45 pages.