The discovery of extracting unconventional (shale) gas through hydraulic fracturing has revolutionised the gas industry in the US and has given rise to a debate over whether it has the potential to reverse the emerging geopolitical equations in the global energy sector which was hitherto seen to be tilting in favour of the conventional energy producers.

When a resource-deficient country becomes industrialised lifestyles become increasingly energy intensive, compelling it to seek resources overseas.

South Asian countries, and particularly India, are hydrocarbon-deficient, and given the pace of economic growth in many of these nations, all of them need huge energy resources to sustain their growth. In accordance with their diversification strategies as well as to enhance energy security they are considering alternate sources and means of imports, including via land pipelines.

Following the dispute over the seizure of a Chinese trawler and its crew by Japan in the disputed waters in the East China Sea believed to be rich in oil and gas resources, Beijing has been flexing its muscles against Tokyo in another area. However, this one may have far deeper consequences not only for Japan but for the rest of the world.

Following the recent economic crisis, concerns over the revival of trade protectionism have surfaced, with some countries imposing or threatening to impose highly trade-distorting legislation to help their domestic industries compete in world markets, raising the spectre of a potential trade war. This paper looks at the attempts by some of the developed countries to introduce trade measures using the issue of climate change as a Trojan horse, to ensure that they do not lose out to the emerging economies.