Unimpeded international trade can help world solve climate crisis, say officials at WTO forum

GENEVA – International trade certainly contributes to greenhouse emissions, but it can also help address the climate crisis and should be kept open and free, noted delegates at the World Trade Organisation (WTO) Public Forum.

WTO director-general Ngozi Okonjo-Iweala told The Straits Times on the sidelines of the forum in Geneva: “Trade can be part of the solution to climate change, such as through the transfer of green technology.

“How do countries get the know-how, components and equipment to make solar panels if we do not trade? We cannot decarbonise by 2050 without trade.”

Dr Okonjo-Iweala urged the 164 members of the WTO, which includes Singapore, to avoid placing trade restrictions on green goods and services, and called for the lowering of tariffs on products such as electric vehicles and solar panels.

She said: “Say I have the technology to make solar panels, but I restrict access to it, how will the countries that do not have the capacity to make their own panels adopt green energy?”

WTO calls to keep trade open come amid signs of accelerating climate change, such as the recent floods in Libya and a heatwave that has led to wildfires in Canada and Greece.

“Without an open and functional trading system, we also cannot efficiently move the goods and services needed to help these countries,” Dr Okonjo-Iweala said.

Climate change has also altered global trading patterns and led to more vulnerability in the global economy.

Take recent moves in India, where the government imposed a ban on non-basmati white rice exports in July when domestic prices rose 3 per cent in a month after heavy monsoon rains damaged crops.

The move led to a jump in demand for rice produced in Thailand, the second-largest exporter after India, causing prices there to surge by as much as 20 per cent, according to local media.

“We need to make sure that wherever food is produced, it can be accessed around the world, so we can make sure people are fed,” Dr Okonjo-Iweala said.

Delegates at the forum agreed that transitioning to renewable and efficient sources of energy is one of the fastest ways to fight the effects of climate change. However, many also noted trade’s existing impact on the environment, with commercial aviation and shipping contributing to energy-related carbon dioxide emissions

In that regard, World Economic Forum president Borge Brende noted at a panel discussing the role of trade in forging a sustainable future that the world needs to triple renewable energy sources over the next decade to achieve net zero.

This means balancing out the amount of greenhouse gases released into the atmosphere with an equal amount that that is removed or offset, resulting in no net increase in emissions.

Besides calling on governments to refrain from imposing unnecessary measures that hinder trade in green goods and technologies, Mr Brende underlined the need to phase out subsidies for fossil fuels: “We should eradicate in the next decade all subsidies of fossil fuel and incentivise the rolling out of renewables.”

Dr Okonjo-Iwaela noted that the WTO can help to move the green agenda forward by acting on existing agreements such as one that requires open, fair and transparent conditions of competition in government procurement.

“Government procurement involves goods worth US$13 trillion (S$17.7 trillion), which is equivalent to 13 per cent of global gross domestic product. Green procurement criteria can be developed so that those participating are incentivised to produce goods in a green way,” she said.

Dr Okonjo-Iwaela added that the WTO can also leverage on an existing trade facilitation agreement to get countries to adopt paperless trade practices: “If we can go from paper to paperless, we reduce our carbon footprint by 63 per cent.”

Deputy secretary-general of the United Nations Conference on Trade and Development Pedro Manuel Moreno noted that the market for climate-friendly goods and services is expanding rapidly, growing by US$10 billion in a year to almost US$2 trillion in 2022.

That is equivalent to 6 per cent of world trade, he said, adding that decarbonisation will depend on each country’s resources and productive capacities.

Mr Morena highlighted the need to scale up climate financing, noting that around US$2.4 trillion in funds would be needed for developing countries to go green.