Trade and the Environment: The Search for Sustainable Solutions

The policy brief examines the long-standing tension between the World Trade Organization's (WTO) focus on trade liberalization and the need for environmental protection. It highlights the failure of the Committee on Trade and Environment (CTE) to produce recommendations and the persistence of harmful subsidies in agriculture, fisheries, and fossil fuels. The author argues that the WTO must integrate science-policy interfaces and prioritize sustainable development to support the Paris Agreement and the 2030 Agenda for Sustainable Development, noting recent member-led initiatives on plastics and climate as potential paths forward.

• Fossil fuel subsidies reached USD 5.9 trillion in 2020, representing approximately 6.8% of global GDP, and are projected to increase to 7.4% of GDP by 2025.
• The WTO Committee on Trade and Environment (CTE), established in 1994 to identify the relationship between trade and environmental measures, has not yet agreed on any recommendations.
• The WTO lacks a robust science-policy interface, meaning it does not have a consistent method for addressing scientific uncertainty when determining if environmental policies are legitimate or merely trade protectionism.
• Global agricultural subsidies exceed USD 600 billion annually and are found to be inconsistent with the 2030 Agenda for Sustainable Development goals regarding poverty reduction, biodiversity protection, and decarbonization.
• Eliminating harmful fisheries subsidies could increase fish biomass by 12.5% (35 million metric tonnes) by 2050 and significantly reduce high seas overfishing, 77% of which is attributed to vessels from China, Taiwan, Japan, Indonesia, Spain, and the Republic of Korea.
• Removing fossil fuel subsidies alone has the potential to reduce global greenhouse gas emissions by up to 10% by 2030 and between 6.4% and 8.2% by 2050.
• Recent WTO member-led initiatives provide a potential way to break the two-decade deadlock, including structured discussions on trade and environmental sustainability (71 members), an informal dialogue on plastics pollution, and a commitment by 45 members to phase out inefficient fossil fuel subsidies.

APA

de Paula,, N. (2022). Trade and the Environment: The Search for Sustainable Solutions. International Institute for Sustainable Development. https://www.iisd.org/articles/trade-and-environment

Chicago

de Paula,, Nicole. Trade and the Environment: The Search for Sustainable Solutions. International Institute for Sustainable Development, 2022. https://www.iisd.org/articles/trade-and-environment.

Wikipedia

{{cite report |last1=de Paula, |first1=Nicole |title=Trade and the Environment: The Search for Sustainable Solutions |publisher=International Institute for Sustainable Development |date=22 February 2022 |url=https://www.iisd.org/articles/trade-and-environment |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{depaula2022trade, author = {de Paula,, Nicole}, title = {{Trade and the Environment: The Search for Sustainable Solutions}}, institution = {International Institute for Sustainable Development}, year = {2022}, month = feb, url = {https://www.iisd.org/articles/trade-and-environment}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }