It is time to create robust trade policies and investments to support climate change efforts.
The last decade has been viewed as the most crucial decade in terms of climate change. It is even becoming more punitive gradually now. This rapid climate change and greenhouse gas emissions are anticipated to have an immense impact on the global economy. Hence, it has now become indispensable for countries to exaggerate their environmental and climate actions. As climate change is a global challenge, nations adopted the Paris Agreement at the COP21 in Paris in December 2015 to curb this issue. But existing climate policies created global warming of about 3˚C above pre-industrial levels.
While addressing environmental impact requires wider cooperation from each country, measures to cope with this need to be well-suited with the international community’s broader ambitions for economic growth and human advancement. The world trade organization (WTO) is one part of the foundation of multilateral cooperation and it could be pertinent in climate change efforts as climate change measures and policies intersect with international trade in several ways. As per the report from WTO, openness in trade can help efforts to lessen and adapt to climate change by promoting an efficient allocation of the world’s resources, raising standards of living and improving access to environmental goods and services.
Many governments worldwide now are taking aggressive steps in their efforts to mitigate climate change and environmental degradation. The EU’s Green Deal, for instance, refers to a deal to make the EU’s economy sustainable. The deal provides an action plan to bolster the efficient use of resources by shifting to a clean, circular economy and restore biodiversity and reduce pollution.
Why Trade Policies are Imperative to Meet Climate Change Goals?
During the past few decades, international trade has expanded at an unprecedented rate. Since 1950, world trade has climbed over twenty-seven-fold in volume terms while the world GDP grew eight-fold. As a result, the share of global trade in world GDP has risen from 5.5 percent in 1950 to 20.5 percent in 2006, the WTO noted.
Advances in technology that has substantially lowered transportation costs and communication have given the rise to world trade. Furthermore, countries have opened up their doors to do trade unilaterally, bilaterally, regionally, and multilaterally. This openness in trade has also driven global trade to the next level. The WTO report said that developing countries particularly now account for 36 percent of world exports, nearly double their share in the early 1960s. However, compared to the past, more trade can be embodied in the manufacture of a final product and more countries can be involved in the process, it mentioned.
Considering these factors of the expansion of global trade are believed to be one of the most vital reasons for trade being raised in climate change discussions. Moreover, the World Economic Forum noted five ideas that governments can apply to their climate change efforts.
- Complete the fisheries subsidies negotiations
- Facilitate environmental goods and services trade, build circular economies
- Report, reduce and eliminate fossil fuel subsidies
- Promote alignment of trade rules and climate change goals
- Enhance collaboration