Trade Essential in Climate Change Action
By Sharon Atieno
With the sixth Assessment Report of the Intergovernmental Panel on Climate Change (IPCC) calling for deep reductions in emissions of carbon dioxide (CO2) and other greenhouse gases (GHGs) to limit global warming to 1.5°C in line with the Paris Agreement, trade remains a crucial part of achieving this ambition.
“The increasing interdependence of climate change and economic development is shaping the future of trade, more and more countries both developed and developing are committed to transforming their production to reduce carbon footprints. Trade then must be one of the engines of this transformation,” Pedro Manuel Moreno, Deputy Secretary General of the United Nations Conference on Trade and Development (UNCTAD) said during the 2023 World Trade Organization (WTO) Public Forum in Geneva, Switzerland.
According to Moreno, reducing emissions and adapting to climate change requires massive amounts of resources, better and greener goods and processes and technology transfer which can only be achieved through trade and with a multilateral trading system like the WTO.
“It is not with punitive measures that we will accelerate transition but with support of trade-related decarbonization as the goal,” he said, adding that facilitating technology transfer and sharing intellectual property is crucial for this transition to take place.
On her part, Dr. Ngozi Okonjo-Iweala, WTO Director-General said the organization as a multilateral trading system has various instruments and tools which can be used to push for net zero emissions by 2050.
She noted that the government procurement agreement which is worth US$13 trillion (13% of global GDP) can be harnessed to force green procurement so that criteria are developed to ensure that those participating in the exchange of goods and services do it in a way that leads to lower carbon emissions.
Additionally, trade facilitation agreements can push countries to digitize trade by moving from paper to paperless trade, which can help reduce carbon footprint by 63%.
Already, WTO Members are putting in place trade-related measures to deal with climate change. The organization’s Environmental Database (EDB) shows that a total of 14,119 environment-related measures were put in place between 2009 and 2019. This also includes environment-related entries identified in WTO members’ trade policy reviews (TPRs). Since 2009, more than 8,700 TPR entries have been included in the database.
Since 1997, annual environment-related notifications have more than quadrupled, reaching a total of 672 notifications in 2019. Their importance also seems to be increasing relative to other policies reflected in the notifications: while in 1997 environment-related notifications accounted for 8 percent of all the notifications, their share has steadily increased to around 15 percent in recent years.
The EDB contains information on a number of different environmental objectives, including afforestation/reforestation, air pollution reduction, ozone layer protection, climate change mitigation and adaptation, energy conservation and efficiency, and alternative and renewable energy.
The database shows that the environmental objective of climate change mitigation and adaptation was identified in 858 of the climate-related measures notified to the WTO for the period 2009-2019. However, “energy conservation and efficiency” and “alternative and renewable energy” are the two main objectives pursued by members, accounting for 76 percent of all climate-related measures.
The ongoing WTO Public Forum is based on the theme, it is time for action, rallying the global community to take action now and live up to the Paris Agreement of limiting global temperature rise to 1.5 degrees. It also calls for taking action together by embracing inclusive growth and sustainable policies to tackle climate change and other pressing issues.
Held since 2001, the Public Forum is the organization’s largest outreach event attracting more than 2,000 participants annually. It provides a unique platform for interested stakeholders from around the world to discuss the latest developments in global trade and propose ways of enhancing the multilateral trading system.