Trade and the Environment: The Search for Sustainable Solutions

This policy brief by the International Institute for Sustainable Development examines the historical and current tensions between international trade rules and environmental protection. It highlights the role of the World Trade Organization (WTO) and its Committee on Trade and Environment (CTE), arguing that the removal of harmful subsidies in fossil fuels, fisheries, and agriculture is essential for achieving sustainable development and meeting climate goals.

• Fossil fuel subsidies represent a significant global economic cost and a barrier to carbon neutrality. In 2020, these subsidies totaled USD 5.9 trillion, approximately 6.8% of global GDP, and are projected to reach 7.4% of GDP by 2025.
• The WTO's Committee on Trade and Environment (CTE), established in 1994 to identify the relationship between trade and environmental measures, has failed to agree on any recommendations to date.
• There is a lack of a robust science-policy interface within the WTO, meaning the organization lacks a principled method for handling scientific uncertainty when determining if environmental policies are legitimate or merely trade protectionism.
• Agricultural subsidies, exceeding USD 600 billion annually, 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 lead to a 12.5% increase in fish biomass (35 million metric tonnes) by 2050 and significantly reduce high seas overfishing, which is 77% attributed to vessels from China, Taiwan, Japan, Indonesia, Spain, and the Republic of Korea.
• Recent WTO initiatives show potential for breaking deadlocks, including structured discussions on trade and environmental sustainability (coordinated by Canada and Costa Rica with 71 members), a 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} }