Clifford Chance has collaborated with the World Economic Forum on the publication, Delivering a Trade and Climate Agenda. The report finds that while businesses are actively pursuing emissions reductions, action on trade policy can help accelerate this shift. The report outlines eight ways in which trade policy can help businesses accelerate the transition to net-zero.
The report is based on interviews with over 30 major businesses around the world, conducted by the World Economic Forum and Clifford Chance between April and August 2021. Interviews revealed the following key opportunities for trade policy to support businesses to accelerate their emissions reductions:
- Tariff reductions on key goods
- Addressing non-tariff distortions in parallel
- Phasing out fossil fuel subsidies
- Building coherence around carbon-based trade policies
- Supporting trade in digital and climate-related services
- Encouraging climate-smart agriculture
- Aligning trade agreements with climate commitments
- Facilitating green investment
The report also outlines how trade policy can do more to address key cross-border challenges to emissions reductions, including: (i) Tariffs on environmental goods; (ii) regulatory fragmentation, including on technical requirements; (iii) divergence on standards; (iv) subsidies and other market distortions; (v) supply chain emissions reporting; (vi) issues with transparency and design of carbon pricing; and (vii) adoption of technology.
Ngozi Okonjo-Iweala, Director-General, World Trade Organization and Patricia Espinosa, Executive Secretary, United Nations Framework Convention on Climate Change notes that the report provides "valuable insights into how businesses are taking steps to enhance climate action across markets. Drawing on these perspectives, it identifies opportunities for trade policy to accelerate climate action, while generating new sources of economic growth and job creation."