Quick Win No. 2
Support developing countries to create an inclusive and sustainable global economy that achieves net-zero emissions
Trade policy can significantly leverage re-globalization to achieve a net-zero world, but it is crucial to ensure these measures include developing countries, particularly the most vulnerable and marginalized. Climate science advocates for enhanced efforts to reduce greenhouse gas (GHG) emissions and move towards a sustainable energy future, as underscored by the 2023 Intergovernmental Panel on Climate Change (IPCC) Synthesis Report. Agreements like the 2015 Paris Agreement and the 2021 Glasgow Climate Pact have set ambitious targets for net-zero carbon dioxide emissions by mid-century. However, developing countries often lack the financial resources, technological advancements, and institutional capacity to meet these targets. This risks their exclusion from the benefits of global climate initiatives such as carbon markets and clean energy transitions.
The Paris Agreement promotes voluntary cooperation among countries in implementing their Nationally Determined Contributions (NDCs), facilitating higher mitigation ambitions and sustainable development. Developing sovereign carbon markets where countries can trade carbon credits generated by the removal of GHG emissions from the atmosphere is one way many developing countries aim to meet their NDC targets. However, they face several challenges in accessing global GHG emissions markets. Improving the quality and integrity of carbon or other GHG credits can stimulate investment and innovation in the Global South. Transparency in measurement, reporting and verification (MRV) processes plays a crucial role to this end.
Enhanced collaboration between the WTO and the United Nations Framework Convention on Climate Change (UNFCCC) is essential to define the WTO's role in supporting trade in GHG credits. The WTO, including through the Trade and Sustainability Structured Discussions (TESSD), can assist developing countries by promoting transparency in trade-related climate measures and encouraging standardized metrics and MRV systems. The WTO also needs to address the perception that current trade practices increase GHG emissions and hinder global efforts to achieve net-zero emissions. Ensuring that trade policies support the NDCs of its members involves creating strategies that enable developed economies to fulfill their commitments to support developing and least developed members through joint and collaborative action between organizations like the WTO, United Nations Trade and Development (UNCTAD), and the International Trade Centre (ITC). Key strategies include reducing tariffs and other trade barriers on environmental goods and services and promoting the rapid dissemination of clean energy technologies and infrastructure. Additionally, transforming the ITC into a Sustainable Trade Centre could help these nations capitalize on their green competitive trade advantages that can also lead to climate reductions. Moreover, members must move towards recognizing certain states as climate vulnerable, to facilitate targeted support and resources to those most at risk from climate change impacts. The specific needs of small island developing states (SIDS) regarding environmental vulnerability should be recognized. While least developed countries (LDCs) receive special attention at the WTO, SIDS have not been formally recognized as a group deserving of special and differential treatment. This contrasts with the UNFCCC and the Paris Agreement, where their vulnerability is acknowledged. Integrating climate vulnerability indices into ongoing WTO negotiations is crucial.
Achieving net-zero emissions requires a concerted international effort. Supporting developing economies should be part and parcel of those efforts, and must begin with a recognition of their special needs.
