Trade and Climate Change- Part One

World leaders are currently gathered in Egypt, attending the 27th Climate Change Conference (COP 27). COP 27 is taking place against a backdrop the devastating consequences of climate change-which have had a negative  impact on the livelihoods. To underline the fact that human population faces an existential threat, Antonio Guterres the UN Chief, while at COP27 noted that unless changes are made immediately, the world is on’ the highway to climate hell.’

Many multilateral organisations have in the past decades, and especially since the coming into force of the Paris Agreement– and international treaty on climate change, devised various initiatives that seek to address climate change. Among these organisations is the World Trade Organisation (WTO),which focuses on multilateral trade rules. This piece focuses on Trade and Climate Change, and the key themes that have emerged over the years.

WTO and Climate Change

The impact of environmental policies on trade, and the impact of trade on the environment — was recognized as early as 1970. Towards the end of the Uruguay Round, trade-related environmental issues, and the role of the World Trade Organization [which was yet to be created] was discussed.

In 2015 during the 10th WTO Ministerial Conference in Nairobi,  there was reaffirmation that international trade can contribute towards delivering sustainable growth for all.

action. There have in the recent past several meetings where climate change discussions have taken centre stage. These are  the Trade and Environmental Sustainability Structured Discussions, the  Committee on Market Access, the TBT Committee, the  Committee on Trade and Environment  meeting, and the SPS Committee meeting.

The WTO’s World Trade Report 2022 pays a special attention to Climate Change  and international ,trade and notes that ‘Trade can play an essential role in helping countries reduce emissions by increasing the availability and affordability of environmental goods, services and technologies. International trade can also help countries adapt to the impacts of climate change and build future resilience’ That Climate change disrupts supply chains has been emphasized in by different experts in their opinion pieces that that appears in the world Trade Report 202. For instance Danae Kyriakopoulou  notes that ‘The trade implications of more frequent and intense extreme weather events (EWEs), of gradual climatic changes and of policy adjustments, such as climate driven taxes and regulation, are already manifesting through multiple channels. ’Gauri Singh of the International Renewable Energy Agency makes a point for decarbonisation, suggesting  that ‘Hydrogen trade can lower energy supply cost energy since cheaper energy is tapped into.‘, Daniel C Esty in his piece on trade implications of  Green House Gas (GHG ) pricing argues that that border tariffs designed to eliminate the unfair advantage arising from GHG externalities should be based on differences in effective rather than explicit GHG prices, which would allow nations greater flexibility in carrying out their climate change policies, and finally, Sophie Punte on  gives ideas on building momentum for zero emissions freight movement- stressing  ‘the need for going  all out to decarbonize freight transport. Solutions range from sustainable aviation fuel and zero-emission ships and trucks to fleet efficiency, a shift to less carbon intensive transport modes and reducing freight demand’

How does the World strike the balance to ensure that international trade continues, and also that climate change challenges are addressed along the way? The United Nations Framework Convention on Climate Change (UNFCCC) provides in Article 3  that measures taken to combat climate change should not constitute a means of arbitrary or unjustifiable discrimination or a disguised restriction on international trade and should be implemented to minimize adverse effects, including on international trade, and social, environmental, and economic impacts on other parties.

Some  important questions

What do all these Mean for the Countries such as those on Africa, the Caribbean and Pacific (ACP Countries) – who are suffering the most devastating effects of Climate change, and yet emit the least amount of Green House Gases? Has the Multilateral Trading System’s attempt to address climate change really benefitted these countries. And are what are the practical suggestions worth implementing after COP27 that can be of help to these [Global South] countries.