The “Trade for Climate” event, held virtually, was opened by WTO Director-General Ngozi Okonjo-Iweala and Secretary-General of the International Chamber of Commerce (ICC), John Denton. Mari Pangestu, Managing Director of Development Policy and Partnerships at the World Bank, also participated in the opening session. Mr Tom de Bruijn, Minister for Foreign Trade and Development Cooperation of the Netherlands, provided a statement for the opening.
DG Okonjo-Iweala said: “COP26 will start in a few days and we need to ramp up ambition to address the climate crisis. We must act now across every economic sector in every country to shift the global economy to a low-carbon development pathway. These dialogues are therefore a very valuable platform for the WTO to hear perspectives from business and other stakeholders and to engage on the way forward.” Her full remarks are available here.
Mr Denton said: “If there are two issues that matter most to the business community, two issues that are inextricably linked, they are trade and climate.”
He added: “It's in our interest to ensure a healthy planet. But how do we get there? It's clear that we need much greater public private cooperation and to break down institutional silos. We need to deliver meaningful outcomes at COP 26 and MC12. And we need to bring in expertise and voices from a wide range of stakeholders, not just business but also civil society.” His remarks are available here.
Ms Pangestu said: “Trade promotes the spread of environmental goods and services that help emission reduction and improve environmental management. So, reducing tariffs and non-tariff barriers for trade in environmental goods is essential to accelerate the Low Carbon transition.”
She added: “It's really critical for developing countries to be part of the conversation, to be at the table, and to participate in any multilateral negotiations to ensure that their interests are considered, and the standards being set to measure carbon footprints reflect the realities in their countries.”
In his statement, Minister de Bruijn said: “We need trade policy to help steer our economies in the right direction. Because climate change affects everything. From geopolitics to migration to economies. From cities to life expectancy. If we don’t start working with nature in a sustainable way, the foundation on which our economies are built will collapse. That’s why we need to make trade greener and develop a green agenda within the WTO.” His full remarks are available here.
Organised by the ICC and the WTO, the event brought together over 100 representatives from the business community, non-governmental organisations and international organisations. After the opening sessions, the participants engaged in breakout sessions focussing on three main themes:
- what is required for trade to drive enhanced National Determined Contributions (NDCs) regarding government action to address climate change under the Paris Agreement
- how to use trade as a tool for climate adaptation
- what steps are needed for a just transition of supply chains to net-zero.
In the first session, participants noted that multilateral responses are needed to tackle global issues such as climate change. They said 80% of the emissions needing to be addressed are in supply chains and emphasised that traceability is important in ensuring supply chains meet their emission targets.
Participants also pointed to the importance of implementing the Trade Facilitation Agreement (TFA) as this could reduce trade bottlenecks at border points and lead to reduced emissions. The need for global harmonization of standards, including on calculation methodology for carbon emissions, was highlighted. Participants also noted that fossil fuel subsidies play a crucial role in the debate on climate.
In the second session, participants focused on the types of risks that climate change brings to trade and development prospects. They also discussed the need to prioritize climate adaptation, including by aligning trade policy with countries' national adaptation strategies. They noted that trade can assist climate adaptation by removing trade barriers to goods, services and technologies needed for adaptation.
Participants noted the challenges of agreeing on a common set of carbon standards and agreed that further work in this area is required. Participants also observed that, in tackling climate change, trade should be coupled with climate investments.
In the third session, participants emphasized the clear role for trade and trade policy in enabling countries to move towards a net zero economy, while engaging in other elements such as investment. The session underscored the need for developing economies and micro, small and medium-sized enterprises to be at the heart of any future agenda on tackling climate change. The participants stressed the need for scaling up technical capacity building to enable them to take ambitious climate action and discussed the role that Aid for Trade can play.
In a recorded message, Patricia Espinosa, Executive Secretary of the United Nations Framework Convention on Climate Change said: “If we want our children and our children's children to inherit a liveable world, we simply cannot return to a business-as-usual model. There can be no neutral position when it comes to climate action. No one can stand on the sidelines or remain impassive before this issue. Deciding to postpone climate decisions, whether by governments or corporate entities is not without consequences, consequences that we are already seeing in extreme weather events around the world.”
In his concluding remarks, Deputy Director-General Jean-Marie Paugam said:
“With less than a week until COP26, today's Dialogue was timely and important for us to hear the voices of business ahead of this year's critical climate talks. It was also our first ever Trade Dialogues focused on Trade for Climate Action.”
He noted that most participants called for trade policy to contribute to combatting climate change and saw a clear role for the WTO. The discussion also provided several clues about possible starting points and avenues for more WTO action on climate change, he said. His full remarks are available here.