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Although the Asia-Pacific region is recovering from the pandemic, as evidenced by the regional trade recovery in 2022, trade growth this year is expected to be modest and slower than in 2022. This is partly due to uncertainties such as trade friction, recession risks, geopolitical tensions, and the ongoing climate crisis. Yaan Duval, the Chief of Trade Policy and Facilitation section of UN ESCAP, discussed different ways to build a more competitive, sustainable, and inclusive trade system main priority being the promotion of climate-smart trade.
THE CLIMATE ISSUE
The climate is a significant concern in the Asia-Pacific region. Trade can increase greenhouse gas emissions but is crucial for spreading green technologies and reducing emissions. This area is the largest emitter of greenhouse gases globally, and economies have increased the share of carbon-intensive fossil fuels in their trade since 2015, with fossil fuel subsidies contributing to emissions and illegal timber trading leading to deforestation. All actors must consider a climate-smart business, including through regional cooperation.
WHAT TO DO?
To make trade more climate-smart, the UN ESCAP suggests the following:
Liberalize trade in climate-smart and environmental goods and services by reducing tariffs and other barriers.
Phase out fossil fuel subsidies to generate fiscal space for sustainable development while supporting vulnerable segments of society.
Implement non-tariff measures to limit the contribution of traded goods to climate change and encourage voluntary sustainability standards.
Support a transition to cleaner, more resource-efficient transport systems, including digitalization and regional cooperation.
Incorporate environment- and climate-related provisions in regional trade agreements, including binding commitments on fossil fuel subsidies and technical assistance for developing countries.
Prepare for carbon pricing and internalize emissions costs through pricing mechanisms in export-related and emission-intensive sectors.
Align pandemic recovery measures with climate action and the circular economy but strive to align with multilateral trade regulations to avoid discrimination.
THE IMPORTANCE OF COLLABORATION
Cooperation is essential for the success of climate initiatives. With climate change being a global issue, coordinated action from all public and private sectors is crucial. Regional governments and businesses can share resources, knowledge, and expertise through Public-Private Partnerships. Combining their efforts to develop and implement sustainable solutions aligned with regulations to adapt to the changing climate. For example, they can work together to implement climate-smart non-tariff measures and comply with regulations aimed at reducing greenhouse gas emissions. This collaborative approach can accelerate progress towards a smart climate future that benefits everyone.
Promoting climate-smart trade can help maximize the benefits of business in addressing climate change while minimizing its risks and costs. At BRANDi, we believe that regional cooperation will be crucial in this effort. By working together, Asia-Pacific countries can ensure that trade becomes more climate-smart and contribute to building a more sustainable and inclusive future for the region.
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