WTO criticizes multiple barriers to trade in environmental goods

Posted November 8, 2022 7:15 AM

Global trade is as much like Dr. Jekyll as it is Mr. Hyde. On the other hand, international trade in goods and services alone accounts for about a third of greenhouse gas emissions. On the other hand, global trade can contribute to the decarbonization of the economy by facilitating the spread of environmentally friendly technologies through the expansion of trade.

It was defended on Monday by World Trade Organization (WTO) Director General Nogozi Okonjo-Iweala during a press briefing at COP27 in Sharm El Sheikh, Egypt, presenting the results of the report. . “While trade itself generates emissions (Editor’s note: greenhouse gases) associated with manufacturing and transport, trade and trade policy can accelerate the diffusion of advanced technologies and best practices, increase incentives for innovation while creating tomorrow’s jobs.” she noted.

For example, if the cost of solar electricity has fallen by 97% since 1990, this is indeed due to international trade and the creation of international value chains. However, there are still many obstacles to the spread of these green technologies, she lamented as she presented the results of the 2022 World Trade Annual Report.

Green trade agreements

First, too few regional trade agreements explicitly include climate change provisions. It is only in 64 out of 349 contracts. And only a few oblige countries that have signed a regional agreement to comply with the Paris Agreement signed at Le Bourget in 2015 at COP21.

The second conclusion is that barriers to trade in environmental goods and services remain significant. Although customs duties on environmental goods are on average lower than on other goods, they remain relatively high in low-income countries. It is important to note that customs taxes and technical regulations governing trade tend to be lower in carbon-intensive industries than in clean ones. Clearly, in the current state of affairs, fossil fuels are still too privileged.

Emissions reduction at stake

For the WTO, the removal of customs duties and the reduction of restrictive technical measures on some energy-related environmental goods (photovoltaic panels, wind turbines, etc.) could increase global exports of these goods by 5% ($109 billion). by 2030. This will improve energy efficiency and reduce global CO2 emissions by 0.6% by 2030, the Organization assures. Spreading environmental innovation on a wider scale would bring even more: it would increase the demand for ancillary services related to the sale, delivery, installation and maintenance of environmental technologies. This will lead to millions of additional jobs.

The WTO claims to play a positive key role in combating global warming and protecting the environment. The organization cites, in particular, an agreement reached this summer in Geneva banning certain fisheries subsidies for the conservation of biodiversity and natural resources. There is still significant progress to be made. It is still necessary that member countries, in the current tense geopolitical context, be able to agree on the means and policies to be followed. For now, Dr. Jekyll has the upper hand.

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