UK trade policy and climate change: Maximising commercial, climate and development outcomes

This research paper outlines a strategy for the United Kingdom to align its post-Brexit trade policy with climate and development goals. It identifies a potential global market of £1.0–1.8 trillion for low-carbon goods and services by 2030 and highlights UK strengths in offshore wind, green finance, and insurance. The authors propose a 'Trade and Climate Checklist' for Free Trade Agreements (FTAs), focusing on 'triple wins' such as tariff elimination for environmental goods and increased market access for professional services, while cautioning against the use of contested carbon border adjustment mechanisms.

• The global demand for low-carbon goods and services, driven by the Paris Agreement and Nationally Determined Contributions (NDCs), is estimated to be worth between £1.0 trillion and £1.8 trillion annually by 2030, which is seven to twelve times the current market value.
• The UK possesses strong comparative advantages in several low-carbon and resilience sectors, including offshore wind, gas turbines, aircraft, insurance, weather and climate modelling, and engineering and environmental consultancy services.
• The UK is well-positioned to act as a global green finance hub; a 2016 PwC report estimated the global green finance opportunity could range from £66 billion to £280 billion per year by 2030, with a compound annual growth rate of 12–15%.
• The UK insurance industry, the fourth largest globally, manages £1.6 trillion in investments and is a net exporter of approximately £1.8 billion (over 60% of total UK services exports), offering significant potential for building climate resilience in developing countries.
• Certain FTA provisions are identified as 'triple wins' because they can deliver commercial, climate, and development outcomes with minimal trade-offs. These include the reduction of tariffs on low-carbon goods, enhanced access for trade in services and establishment, and the harmonisation of product standards and technical regulations.
• The document identifies significant barriers to UK financial and insurance services in focus countries, specifically foreign ownership and equity restrictions (China, India, Indonesia, Kenya, Pakistan), barriers to foreign professionals (India, Indonesia, Kenya, Russia), and local incorporation requirements (Brazil, Indonesia, Pakistan, Russia).
• While environmental chapters in FTAs can signal intent and support dialogue, empirical evidence on whether they actually produce environmental effects is inconclusive, and they are often viewed with suspicion by developing countries who fear they may be used to limit competitiveness.
• Carbon border adjustment mechanisms (BAMS) are described as highly contested and potentially protectionist; the paper suggests that for the UK, promoting collaboration on carbon pricing is likely to be more environmentally effective and less trade-limiting.
• The paper proposes an 'FTA Trade and Climate Checklist' to guide policy-makers, recommending the elimination of tariffs on low-carbon goods using the WTO Chair's list, prioritising services market access (especially Mode 3), and using FTAs as platforms for subsidy cooperation in the G20 and WTO.

APA

Brown, P., Low, L. P., & Booth, K. (2017). UK trade policy and climate change: Maximising commercial, climate and development outcomes. Climate and Development Knowledge Network. https://cdkn.org/sites/default/files/files/Climate-change-and-trade-WP_Pr4Final_WEB.pdf

Chicago

Brown, Phil, Lit Ping Low, and Katharine Booth. UK trade policy and climate change: Maximising commercial, climate and development outcomes. Climate and Development Knowledge Network, 2017. https://cdkn.org/sites/default/files/files/Climate-change-and-trade-WP_Pr4Final_WEB.pdf.

Wikipedia

{{cite report |last1=Brown |first1=Phil |last2=Low |first2=Lit Ping |last3=Booth |first3=Katharine |title=UK trade policy and climate change: Maximising commercial, climate and development outcomes |publisher=Climate and Development Knowledge Network |date=September 2017 |url=https://cdkn.org/sites/default/files/files/Climate-change-and-trade-WP_Pr4Final_WEB.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{brown2017trade, author = {Brown, Phil and Low, Lit Ping and Booth, Katharine}, title = {{UK trade policy and climate change: Maximising commercial, climate and development outcomes}}, institution = {Climate and Development Knowledge Network}, year = {2017}, month = sep, url = {https://cdkn.org/sites/default/files/files/Climate-change-and-trade-WP_Pr4Final_WEB.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }