Making the International Trade System Work for Climate Change: Assessing the Options

The report evaluates 22 options to make the international trade system more supportive of climate action, categorising them into general WTO reforms, border carbon adjustments (BCAs), and fossil fuel subsidy reforms. It concludes that legal changes at the WTO are currently unfeasible due to geopolitical tensions and the requirement for consensus. Instead, it identifies 'low-hanging fruit' such as procedural changes, including the integration of climate expertise into dispute panels and enhanced coordination between the WTO and UNFCCC. The report also highlights the role of regional trade agreements (RTAs) and plurilateral initiatives, like the Environmental Goods Agreement (EGA), as more viable paths for like-minded countries to advance climate objectives.

• Legal reforms at the WTO, including amendments, waivers, authoritative interpretations, and peace clauses, are considered very difficult to implement in the short term due to the consensus requirement and geopolitical conflicts, such as trade tensions between the United States and other nations.
• Procedural changes are viewed as more politically promising, specifically the inclusion of climate-related technical expertise in WTO dispute settlement panels, which is feasible under existing rules.
• Enhanced coordination between the WTO and the UNFCCC through existing forums, such as the WTO Committee on Trade and Environment (CTE) and the UNFCCC's 'Improved Forum on the Impact of the Implementation of Response Measures', is identified as a pragmatic approach with high short-term potential.
• The Environmental Goods Agreement (EGA) could facilitate the diffusion of clean technologies by lowering tariffs, but negotiations have been stalled since December 2016 due to disagreements over the definition of environmental goods.
• Regional Trade Agreements (RTAs) offer a viable alternative for like-minded countries to experiment with climate provisions; the European Union has pioneered this by refusing to sign trade deals with countries that have not ratified the Paris Agreement.
• Border Carbon Adjustments (BCAs) are highly controversial and unlikely to achieve multilateral consensus in the short term; progress is more likely to occur at a regional level among a coalition of like-minded countries.
• Addressing fossil fuel subsidies through the WTO is most feasible in the short term via voluntary transparency measures, such as flagging subsidies in Trade Policy Reviews (TPRs) and adopting political declarations.
• Comprehensive legal reform to prohibit fossil fuel subsidies, such as amending the Agreement on Subsidies and Countervailing Measures (ASCM), is the most challenging option and would likely be a long-term process.

APA

Das, K., van Asselt, H., Droege, S., & Mehling, M. (2018). Making the International Trade System Work for Climate Change: Assessing the Options. Climate Strategies. https://climatestrategies.org/wp-content/uploads/2018/07/CS-Report-_Trade-WP4.pdf

Chicago

Das, Kasturi, Harro van Asselt, Susanne Droege, and Michael Mehling. Making the International Trade System Work for Climate Change: Assessing the Options. Climate Strategies, 2018. https://climatestrategies.org/wp-content/uploads/2018/07/CS-Report-_Trade-WP4.pdf.

Wikipedia

{{cite report |last1=Das |first1=Kasturi |last2=van Asselt |first2=Harro |last3=Droege |first3=Susanne |last4=Mehling |first4=Michael |title=Making the International Trade System Work for Climate Change: Assessing the Options |publisher=Climate Strategies |date=July 2018 |url=https://climatestrategies.org/wp-content/uploads/2018/07/CS-Report-_Trade-WP4.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{das2018making, author = {Das, Kasturi and van Asselt, Harro and Droege, Susanne and Mehling, Michael}, title = {{Making the International Trade System Work for Climate Change: Assessing the Options}}, institution = {Climate Strategies}, year = {2018}, month = jul, url = {https://climatestrategies.org/wp-content/uploads/2018/07/CS-Report-_Trade-WP4.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }