The World Trade Organization (WTO) is set to play a pivotal role at the upcoming climate conference, COP28, highlighting its growing engagement in climate change discussions. This year, the WTO is co-leading a Trade Day at the conference, scheduled for December 4, 2023, in Dubai. This marks a significant shift, as it’s the first time trade features prominently in such climate-focused discussions.
The WTO’s participation underscores the intricate link between global trade dynamics and climate change. Policies like the Carbon Border Adjustment Mechanism (CBAM) have sparked tensions between developed and developing countries, indicating the complex impact of climate change on trade.
At COP28, the WTO aims to foster discussions on how trade can support climate goals. It plans to host the first Trade House Pavilion at the conference, dedicated to exploring solutions on integrating trade into climate action strategies. The 2022 World Trade Report by the WTO emphasized the role of trade in reshaping countries’ economic and trade prospects in the face of climate change, proposing that trade can be a force multiplier in climate adaptation efforts by reducing costs and enhancing impact.
However, opinions on the WTO’s involvement in climate change issues are mixed. Some experts view the global trading system as crucial for achieving decarbonization, especially for resources like lithium for batteries or rare earth minerals for wind energy, which require international collaboration and trade. Conversely, there is concern among developing countries about the potential use of trade-environment linkages by developed nations to restrict industrial development in less developed regions.
As COP28 approaches, these varied perspectives are expected to shape discussions, emphasizing the need to balance trade policies with effective and equitable climate action. The intersection of trade and climate policies at COP28 reflects the evolving global landscape, where environmental concerns are increasingly influencing economic and trade decisions.
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