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This article discusses the carbon accounting and carbon-labelling schemes being developed to address growing concerns over climate change. Its particular concern is their impact on small stakeholders, especially lowincome countries. The popular belief that trade is by definition problematic is not true; carbon efficiencies elsewhere in the supply chain may more than offset emissions from transportation. Indeed, low-income countries may offer important opportunities for carbon emission reductions because of their favourable climatic conditions and use of low energy-intensive production techniques. However, their effective inclusion in labelling schemes will require innovative solutions to provide low-cost data collection and certification.

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The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries.Financial support for the project was provided by Umbrella Facility for Trade Trust Fund with contributions from the Governments of the United Kingdom (DFID), Sweden (Sida), Norway (Ministry of Foreign Affairs), Netherlands (Ministry of Foreign Affairs, and Switzerland (SECO).

All rights reserved 1 2 3 4 13 12 11 10 World Bank Studies are published to communicate the results of the Bank's work to the development community with the least possible delay. The manuscript of this paper therefore has not been prepared in accordance with the procedures appropriate to formally-edited texts. Some sources cited in this paper may be informal documents that are not readily available. This volume is a product of the staff of the International Bank for Reconstruction and Development / The World Bank. The fi ndings, interpretations, and conclusions expressed in this volume do not necessarily refl ect the views of the Executive Directors of The World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries.