Frontier today hosted an on-line panel discussion on the relationship between policies to tackle trade and climate change.

The panel was part of the inaugural Geneva Trade Week, organised by the Graduate Institute of Geneva.  The panel featured Matthew Bell (Director, Frontier Economics), Isabelle Durant (Deputy Secretary General, UNCTAD), Dr. Emily Lydgate and Professor L. Alan Winters (both Sussex University). The panel was chaired by Amar Breckenridge (Senior Associate, Frontier Economics).

In starting the discussion, Matthew Bell presented the perspective of climate change policymakers, noting that governments face both internal political and legal pressures to enforce climate change commitments. This in turn creates strong domestic pressures for government intervention to achieve decarbonisation, and casts a firm spotlight on the need to manage international effects such as carbon leakage. The onus is on the trade policy makers to create space for desirable policy interventions, and find mechanisms to help trade make a positive contribution to meeting climate targets.

Isabelle Durant echoed the need for policy space to achieve sustainable development objectives. She also underscored that the fragmentation between trade and climate negotiating communities was a major obstacle. Emily Lydgate said that given the limited scope to rewrite trade rules, options included relying on reinterpreting rules via WTO jurisprudence, and through regional and plurilateral initiatives. Alan Winters pointed to research that suggested that FTAs between developed and developing countries can reduce the emissions-intensity of developing country exports. Carbon border tax adjustments were the prime candidate for managing leakage issues. Matthew Bell pointed to on-going work that can help with the measurement of embodied carbon intensity of traded goods, and thus address the principal implementation question surrounding these mechanisms.  

Matthew Bell concluded by echoing a common sentiment across the participants:  “climate and trade negotiators need to spend more time talking to each other. In particular, there is a need for trade negotiators to better understand the objectives of climate treaties and for climate negotiators to better understand where and how those objectives interact with the objectives of trade negotiations.”

For more information on our thoughts on carbon pricing, please click here.