How trade can become a gateway to climate resilience

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Molly Harriss Olson, CEO, Fairtrade Australia and New Zealand

• Climate change is expected to severely hamper many sectors of global trade in the near future.
• But, if exporting countries adopt sustainable and climate-resilient practices, global trade can be used to mitigate climate change and uplift the world’s poorest.
• Initiatives like the World Trade Organization’s Aid for Trade recognize and act upon the importance of facilitating trade to equitably tackle climate change.

Most people don’t think about climate change when they lift a café latte to their lips or nibble on a square of chocolate — but this could soon change.

Based on current trajectories, around a quarter of Brazil’s coffee farms, and 37% of Indonesia’s, are likely to be lost to climate change. Swathes of Ghana and Cote d’Ivoire — where most of the world’s chocolate is sourced — will become too hot to grow cocoa by 2050.

Climate-related droughts and deadly heatwaves across the world have coincided with severe storms, cyclones, hurricanes, and, of course, a pandemic. As a consequence of these shocks, millions of people have been left without homes, and a growing number of people now face starvation and a total collapse of livelihoods as growing and exporting staple crops becomes untenable.

Trade as a tool for climate resilience

We must immediately rethink the shape of our economies, agricultural systems and consumption patterns. Our priority is to manufacture climate resilience in global economies and societies — and we must do it quickly.

Trade can kickstart the emergence of climate-resilient economies, especially in the poorest countries. Trade has a multiplier effect on economies by driving production growth and fostering the expansion of export industries. By shifting focus to production and exports that increase climate resilience, there is potential to exponentially increase the land surface and trade processes prepared to withstand the climate crisis.

Take Togo. Between 2015 and 2021, the country’s soybean exports grew by 80% and export earnings by 353%. In 2015, Togo produced less than 25,000 tons of soybeans. Since then, production has increased five-fold to more than 200,000 tons in 2021. During the same period, the surface of the small country dedicated to the cultivation of soybeans grew from 60,000 to 69,700 hectares.

If this surface increase was climate-resilient, the country would be combating an existential threat against humanity while also improving the economic outlook of its people. If countries leverage climate-resilient production through trade, they can accelerate the rate at which economies adapt to the threats of climate change.

This has already started. In Timor Leste, coffee communities are exposed to the adverse effects of heavy rains as coffee grows at high altitudes in mountainous areas. Landslides cause roadblocks that interrupt the coffee supply chain and trade of essential products not grown on farms. Coffee farmers are mapping the risk of landslides and, with the help of partners like Fairtrade and the Enhanced Integrated Framework, looking to adopt sustainable soil and water management.

In 2021, Fairtrade partnered with Grow Ahead to create a crowdfunding platform that addresses global climate change with local solutions. The first project, with Ghana-based cocoa producer Kuapa Kokoo, will plant 150,000 timber trees and 30,000 fruit trees, reforesting 4,800 hectares over two years. The reforestation effort will work with 2,075 local farmers across 25 communities to create microclimates, reducing the impact of climate change on cocoa farmers.

Mobilizing women and girls for climate resilience

There are some critical issues that must be addressed before climate-resilient economies can materialize, especially in the poorest countries.

First, producers need to be trained in environmentally friendly agricultural practices that deliver export-ready products to market. Also, creating climate-resilient economies depends on the participation of women and girls. We know women and girls make up around 60% of the world’s hungry, but they are less than 20% of the world’s landowners. However, if women have the same access to productive resources as men, they can increase crop yields and raise agricultural outputs, contributing to the increased availability of both domestic consumption and exports.

One women’s cooperative with more than 500 smallholder women coffee farmers in Kenya has learnt and employed sustainable agricultural practices, and now more than 70% of the coffee they produce is of premium quality. That is an increase from 25% when the Growing Women in Coffee project began. This increase in quality will ensure that the coffee can be sold on national markets, and even exported to neighbouring countries and beyond.

In this context, Aid for Trade plays a central role in supporting the uptake of climate-resilient trade. The upcoming WTO Global Review of Aid for Trade — aptly focused on “Empowering Connected Sustainable Trade” — will provide a forum to discuss this critical issue of our time.

Our hope is that the forum sparks innovative ideas on how Aid for Trade can fast-track climate-resilient economies in the poorest countries by helping them to expand their trade opportunities.

In addressing the existential threat of climate change, and addressing it with climate resilience, we can create new gateways that make trade fairer and lives better — especially for the world’s most vulnerable.

With contributions from Ratnakar Adhikari, Executive Director, Enhanced Integrated Framework.