Implementing the Paris agreement- linking trade and the fight against climate change

Written by: Ricci Symons

Here at COP22, the United Nations Conference on Trade and Development (UNCTAD) held a high level interactive discussion on the role international trade can play in helping countries implement their nationally determined contributions in the battle against climate change.

Coming together for better results

“We need to look at a platform for UN agencies to have a dialogue, starting here, but continuing on, so we can continue to exchange ideas and head towards carbon emission reduction. All parties should cooperate to promote a supportive and open international economic system, leading to sustainable economic growth, allowing them to take measure to combat climate change,” said William Agyemang-Bonsu of the UNFCCC.

Bonapas Onguglo from UNCTAD followed on from William, stating, “economic diversification and meeting NDCs go hand in hand. Now we need to tap into vast resources in the public and private sectors in order to transfer to a low-carbon economy.

“It is important to stabilise the environmental regime so that we can stabilise the trade regime,” Bonapas added. “To transfer to a low-carbon economy, we need businesses at every level and in every sector. But it cannot be global top-down, but rather needs to be from the bottom up. Meeting climate goals, means meeting international trade demands, we need to create the need for green goods, and then make sure we can supply that demand.”

Innovation and technology

Anders Aeroe of the International Trade Centre (ITC) posed the following question: how does the Paris agreement impact small and medium enterprises? He spoke of the worries of managing a ‘just transition’ to a low-carbon economy. Especially when you consider high unemployment rates and poverty. He went on to say, “climate policies can have a positive side for businesses. There are opportunities for those that are willing to innovate.”

Aik Hoe Lim from the World Trade Organisation (WTO) added, “Economic diversification doesn’t exist without taking trade into account. And not just trade but also climate efficiency.”

He believes that the first point of action should be on reducing cost of key climate technologies, and speeding up production. Reiterating what was said earlier, he believes that the demand needs to be created and encouraged, and then crucially it needs to be met.

WTO are concentrating on tariffs on important tech like LED bulbs or solar cookers. The average tariff may be low, but you have lots of tariff peaks-ranging 35-100 per cent of the cost. This is one area where work can be done to reduce costs and eventually eliminate tariffs on climate goods.

There is also an argument that trading internationally can encourage producers to raise their environment standards and innovate. When there are agreed international standards, this can only help. There is already a move towards harmonisation with international standards. Rising from one per cent in 2000, it was already at 27 per cent last year, with a projection of 50 per cent by 2040.

Climate smart agriculture

IFAD’s Director Margarita Astralaga gave the IFAD point of view on trade. She talked about how food is a primary commodity, universally needed, but as we all know, agriculture is part of the problem, as the second net producer of greenhouse gas emissions. “Therefore the primary sector needs to be brought on board. The agriculture sector can help us produce more food whilst at the same time reducing our carbon footprint,” she went on to say.

Margarita gave an insight into how IFAD works. When talking about climate smart agriculture (CSA), she highlighted how it has been practiced by indigenous peoples for ages, and what IFAD does is to bring that back while also complimenting it with new technology, and expanding its implementation.

“93 per cent of the developing world NDCs talk about CSA. With it, we offset millions of tonnes of CO2. We now know we need to still produce more food, by 2050 food production needs to go up at least 60 per cent. We have to marry food supply with reducing carbon footprint and trade.”

“We must get serious about fostering climate smart development pathways,” she concluded.