Sharm el-Sheikh: International trade and greater cooperation can amplify global efforts to address climate change and put the planet on a sustainable trajectory. Leveraging trade to tackle climate change presents development and growth opportunities and will require significant policy actions to advance a just transition towards a low-carbon, inclusive and resilient future.
The 2022 edition of the World Trade Organization’s World Trade Report titled “Time to Act: Implementing Trade-Related Contributions to the Global Response to Climate Change”, presents a new analysis and recommendations in the face of this existential threat. The WTO’s flagship publication, released at the 27th United Nations Climate Change Conference (COP27) here today, explores its multifaceted relationship with international trade and looks at how its consequences might alter trading patterns and relationships. It exploreshow trade could be a force multiplier for the global response to the climate crisis.
The report makes clear that trade and climate change are deeply intertwined, and that more effective responses to mitigate and adapt to climate change will require stronger and better international trade cooperation. The WTO Director-General Ngozi Okonjo-Iweala will present the report at a high-level event for world leaders at COP27 tomorrow.
The report conveys four main messages: first, climate change is a major threat to future growth and prosperity due to potential productivity losses, production shortages, damaged transport infrastructure and supply chain disruptions. Furthermore, without significant reductions in global greenhouse gas (GHG) emissions, many countries will likely find their comparative advantages changing, with agriculture, tourism and some manufacturing sectors particularly vulnerable to climate impacts.
Second, trade is a force multiplier for countries’ adaptation efforts in the face of climate disruptions, reducing the costs of technologies and critical goods and services. In the longer run, open international markets would help countries achieve necessary economic adjustment and resource reallocation. This is particularly relevant for the most vulnerable economies — least-developed countries, small-island developing states and landlocked developing countries.
Third, trade can reduce the cost of mitigating climate change — by supporting the reduction or prevention of GHG emissions — and speed up the transition to a low-carbon economy and the creation of green jobs. WTO simulations presented in the report suggest that eliminating tariffs and reducing non-tariff measures on a subset of energy-related environmental goods could boost exports by 5 per cent by 2030, while the resulting increases in energy efficiency and renewable uptake would reduce global emissions by 0.6 per cent.
Finally, the report emphasizes that international cooperation on trade-related aspects of climate policy is vital for making actions more effective, and the low-carbon transition more just, minimizing trade frictions and investor uncertainty. The report shows that, without global cooperation on ambitious climate policies, the world will not achieve the Paris Agreement’s goal of limiting the global temperature rise to well below 2 degrees Celsius.
– global bihari bureau
