Oluchi Chibuzor
The Director-General of World Trade Organisation (WTO), Dr. Ngozi Okonjo-Iweala has said an effective strategy for tackling global warming cannot be successful without governments taking into account the important role of trade in meeting climate goals.
She stated this, while speaking at a high-level event with world leaders during the ongoing COP27 climate summit in Sharm El-Sheikh, Egypt, to mark the launch of the WTO’s World Trade Report, which this year focuses on climate change and international trade.
According to her, the world cannot afford to leave trade and WTO behind in climate actions.
The Director-General noted that the World Trade Report maps out pathways for governments on how to use trade support national action plans – known as nationally determined contributions (NDCs) – for tackling climate change.
She maintained that each party to the UN’s 2015 Paris Agreement, which sets the target of limiting global warming to 1.5°C, was required to establish an NDC and update it every five years.
In her words, “There is one big missing issue in what we need to do to fight climate change, and that is the absence of trade and trade policies in the nationally determined contributions and national adaptation plans.
“We cannot afford to leave trade and WTO behind in this effort. The reason we’re here to launch this report is because we want to make that point, and to offer specific recommendations and some actions that countries can take and fold into the revision of their plans.”
Examples of such trade actions include opening up trade in environmental goods and services, improving cooperation on carbon measurement and verification, and transforming the WTO’s Aid-for-Trade initiative into an investment programme that expands opportunities for sustainable trade in less affluent nations.”
According to her, international cooperation on trade-related climate policy, such as carbon pricing and decarbonisation standards could also minimise trade frictions and investor uncertainty arising from unilateral climate actions, which may in turn impose disproportionate costs on firms and governments in developing countries.
The report noted that the WTO could play a valuable role as a platform for transparency and potential harmonisation of such measures.
Furthermore, the DG noted the important role of financing in helping developing countries address the challenges of climate change, while urging rich nations to meet their commitment to jointly provide $100 billion annually to support climate action in these countries.
She noted the WTO’s Aid for Trade programme, which seeks to mobilise resources to address the supply-side and trade-related infrastructure obstacles identified by developing and least-developed countries.
She also noted that $48.7 billion was disbursed last year for such support, of which 31 percent was allocated for climate-related actions.
“This is something we can work on, to push more of that towards climate-related goals,” she declared.
Okonjo-Iweala also noted that the WTO was working with the IMF, the Organisation for Economic Co-operation and Development and other organisations on a global carbon pricing framework.
“The WTO is examining how to work in criteria that takes into account the amount countries pollute and national income levels so that members accounting for a small share of global carbon emissions will find such a framework more acceptable.”
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