• Trade and climate policy-makers have worked in separate silos for too long.
  • We need to have a deeper conversation around climate change and trade.
  • Leadership and breaking down silos will be key.

International trade and climate change are two of the most vexing global policy problems. While the rise of trade wars and the inability of states to deliver meaningful climate results are well known, the links between trade and climate change have been under-explored. For too long, climate and trade policy-makers have operated in distinct silos. But the fact is that trade impacts the climate; regulation in one sphere will inevitably impact the other. A more sophisticated conversation about trade and climate change is vital.


We need more structured dialogue on three core issues:

– How can the multilateral trading system meaningfully help towards meeting the goals of the Paris Agreement, namely to limit global warming to 1.5°C and reach net-zero greenhouse gas emissions by 2050?

– What national or regional trade policy tools could be used to combat climate change without being disguised protectionism?

– How can the upcoming WTO Ministerial Conference in 2020 be used to achieve a step-change in how the world deals with trade and climate change?

How policy-makers think about improving the alignment of climate and trade regimes should be driven by these core principles.

Leadership and breaking down silos

First, achieving meaningful progress on the trade-climate nexus demands more concerted and effective leadership as well as focused attention on breaking down policy silos.

On leadership, we need governments, businesses and civil society to step up to articulate a vision of how trade can be made to work both for people and the planet.

Already, we can see some great examples of this:

– At the most recent COP25 round of climate negotiations, some 73 governments, 14 regions, 398 cities, 786 businesses, 16 investors and 2,100 signatories of the ICC Chambers Climate Coalition committed to achieving net-zero CO2 emissions by 2050 through the Climate Ambition Alliance.

– Among governments, the launch of negotiations for an Agreement on Climate, Trade and Sustainability (ACTS) between Costa Rica, Fiji, Iceland, New Zealand and Norway – which will focus on fossil-fuel subsidy reform, market access for climate-friendly technologies, and climate-related labelling – will serve as a valuable pathfinder for addressing the intersection of climate, trade and sustainability.

– At the WTO, 12 member states have endorsed a statement in favour of action to reform fossil-fuel subsidies, starting with information-sharing, and are working to attract more supporters. Further, the interest that a diversity of WTO members has expressed in the trade dimensions of a more circular and low-carbon economy, the trade impacts of climate-related natural disasters, greening aid for trade, market access for climate-related technologies and transportation-related CO2 emissions also warrant more structured dialogue and attention.

– Around the world, civil society groups committed to net-zero carbon emissions are spearheading practical campaigns and partnerships to promote less carbon-intensive production, distribution and consumption choices in order to lower the carbon footprint of international trade.

What’s the World Economic Forum doing about climate change?

Climate change poses an urgent threat demanding decisive action. Communities around the world are already experiencing increased climate impacts, from droughts to floods to rising seas. The World Economic Forum’s Global Risks Report continues to rank these environmental threats at the top of the list.

To limit global temperature rise to well below 2°C and as close as possible to 1.5°C above pre-industrial levels, it is essential that businesses, policy-makers, and civil society advance comprehensive near- and long-term climate actions in line with the goals of the Paris Agreement on climate change.

The World Economic Forum’s Climate Initiative supports the scaling and acceleration of global climate action through public and private-sector collaboration. The Initiative works across several workstreams to develop and implement inclusive and ambitious solutions.

This includes the Alliance of CEO Climate Leaders, a global network of business leaders from various industries developing cost-effective solutions to transitioning to a low-carbon, climate-resilient economy. CEOs use their position and influence with policy-makers and corporate partners to accelerate the transition and realize the economic benefits of delivering a safer climate.