The World Trade Organisation should address trade barriers for low-carbon industries, among other measures, to address the role of global trade in driving climate change, said Director-General Ngozi Okonjo-Iweala in a report released on Monday.
The most realistic way to reduce emissions without lowering living standards in richer countries and harming development prospects in poorer ones is to advance low-carbon technologies, according to the WTO's World Trade Report 2022, which was released at the COP27 climate summit in Egypt.
“The WTO has an opportunity to use the current moment to strengthen its role as a forum for trade and climate change coordination, to address trade policy barriers impeding the dissemination and use of low-carbon technologies and to support structural changes required to decarbonise the global economy,” she wrote in the report's foreword.
According to the report, the 164-member WTO could help is by lowering tariffs and other barriers for low-carbon industries, which are typically higher than those for carbon-intensive industries.
According to a WTO simulation estimate included in the report, eliminating such measures could increase global exports of energy-related environmental goods, such as solar panels or smart heating controls, by 5 per cent by 2030, or USD 109 billion, while also lowering emissions. Another way, according to the report, is to set a broadly accepted carbon price.
According to the global trade watchdog, trade has historically been “part of the problem” by generating transportation emissions and fueling carbon-intensive growth.
According to the OECD policy forum, nearly a third of the world's total carbon dioxide emissions were embodied in global goods and services exports in 2018.
“However, with the right policies in place, trade can be a major part of the solution in the future, trade cooperation is critical to accelerating this global transformation,” report said.