Trade and Climate Change Linkages

The document examines how trade policies influence climate change through scale, composition, technique, and direct effects, and analyzes the legal interactions between WTO law and the UNFCCC/Kyoto Protocol. It also assesses the physical impacts of climate change on trade infrastructure and the competitiveness implications of implementing climate regulations.

• Trade policy changes impact climate change through four primary mechanisms: scale effects (increased economic activity leading to more GHGs), composition effects (shifts in national production based on comparative advantage), technique effects (adoption of more energy-efficient technologies), and direct effects (increased GHG emissions from transporting goods).
• While there are no significant historical conflicts between trade law (WTO) and climate law (UNFCCC/Kyoto Protocol), legal uncertainties exist regarding standards based on the GHG-intensity of production rather than end-product characteristics, and the legality of border tax adjustments.
• Climate change physically threatens trade by altering comparative advantages in agriculture and forestry, damaging coastal infrastructure like ports and refineries through rising sea levels and flooding, and disrupting high-latitude oil and gas installations via melting permafrost.
• Climate policies can create competitiveness challenges, specifically 'leakage,' where firms relocate to jurisdictions with weaker regulations, and potential unfair advantages for domestic industries depending on how policies are implemented.
• Specific trade policy interventions can be designed to support climate goals, such as lowering tariffs on environmental goods and services to trigger positive technique effects, or using government procurement to favor low GHG-emitting goods.

APA

Cosbey, A. (2007). Trade and Climate Change Linkages. International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/trade_climate_linkages.pdf

Chicago

Cosbey, Aaron. Trade and Climate Change Linkages. International Institute for Sustainable Development, 2007. https://www.iisd.org/system/files/publications/trade_climate_linkages.pdf.

Wikipedia

{{cite report |last1=Cosbey |first1=Aaron |title=Trade and Climate Change Linkages |publisher=International Institute for Sustainable Development |date=2007 |url=https://www.iisd.org/system/files/publications/trade_climate_linkages.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{cosbey2007trade, author = {Cosbey, Aaron}, title = {{Trade and Climate Change Linkages}}, institution = {International Institute for Sustainable Development}, year = {2007}, url = {https://www.iisd.org/system/files/publications/trade_climate_linkages.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }