Trade and climate policies must go hand in hand
‘Good trade and climate policies will open up new market opportunities in the low carbon economy, especially for small and medium-sized enterprises (SMEs) in developing countries.’
That was the message from Arancha González, Executive Director of the International Trade Centre (ITC), at a high-level dialogue held at the World Trade Organization (WTO) that explored how the Paris Agreement on climate change could affect trade opportunities for least developed countries (LDCs). The Paris Agreement was adopted by the 196 parties to the United Nations Framework Convention on Climate Change at the 21st session of the Conference of the Parties (COP21) held in December 2015.
Opportunities and challenges
During the discussions, which were moderated by Vangelis Vitalis, Ambassador of New Zealand to the WTO, participants explored the role that trade could play in strengthening the resilience of LDCs towards climate change and seizing the new market opportunities that are emerging from the low-carbon economy.
Opening the event Eloi Laourou, Ambassador of Benin to the United Nations and other international organizations in Geneva, highlighted the devastating social and economic impacts of climate change, and said that inclusive trade could help LDCs become better equipped to tackle these impacts.
Ms. González underlined how trade and the Paris Agreement are interlinked, and jointly affect the future of all LDCs. She said that commitments from developed countries to reduce their emissions and to provide climate finance to LDCs create both new business opportunities and a stronger incentive for LDCs to apply climate-resilient strategies. Ms. González said that ITC has been supporting this effort for many years, especially through the Aid for Trade initiative which seeks to strengthen climate resilience in LDCs through guidance on adaptation of renewable energy and other resource-efficient technologies.
‘ITC has developed innovative approaches to assist exporters reduce climate change risk,’ she said. ‘Through ITC’s Trade and Environment programme, we have developed an environmental mainstreaming manual and provide staff training to ensure greater focus on climate resilience in project design, as well as a range of climate smart agriculture trade projects.’
Solutions: multilateralism and trade
Many of the panellists called for closer collaboration and stressed that climate change is a global challenge. There is a need for the Geneva-based trade community to ensure that trade is on the agendas when climate change is discussed elsewhere, including the forthcoming COP22 , which will be held in Marrakech, Morocco.
Alvaro Cedeño Molinari, Ambassador of Costa Rica to the WTO, said that trade policies could act as a tool to spread ideas, methods and spur the uptake of low-carbon climate technologies in LDCs. Such policies could also encourage countries to implement sustainable and eco-friendly standards, he said.
Bonapas Onguglo, Head of Trade, Environment, Sustainable Development and Climate Change at the United Nations Conference on Trade and Development (UNCTAD), said that increased awareness among consumers on where and how products have been produced, provides unique opportunities for LDCs to participate in the global low carbon value chain.
The Paris Agreement reinforced the need to increase efforts to limit the rise in average temperatures and introduced the new benchmark of not exceeding 1.5°C above pre-industrial levels. To reach this goal, the Paris Agreement states that signatories should implement a mixture of mandatory and voluntary approaches towards climate actions.
The Agreement has great importance for the world’s 48 LDCs as they are among the most vulnerable to the adverse impacts of climate change. For example, in the last couple of years increased weather volatility has severely affected crops’ yields and productivity, leading to additional stress on these countries’ food security and subsequently increasing their reliance on costly imports.
The event on 20 June was organized by the Embassy of Benin in Geneva and ITC in partnership with the Embassies of Costa Rica, France, Morocco and New Zealand, and WTO and UNCTAD.
Learn more about ITC’s Trade and Environment programme.