Greening Aid for Trade and Sustainable Development

The report argues that greening Aid for Trade (A4T) is essential for supporting developing countries in their transition to a sustainable global economy. It identifies a gap between the reported environmental objectives of A4T and actual project implementation, noting that while many donors use Rio markers, few projects have a clear environmental purpose. The document proposes six complementary pathways to green A4T: mainstreaming environmental considerations, securing additional financing, improving monitoring systems, integrating trade into climate funding, strengthening South-South cooperation, and fostering coherence with wider financial mechanisms like debt relief and climate finance. It emphasizes that developing countries must lead the prioritization of these resources to ensure a just transition that avoids new trade barriers and addresses the 'double exposure' of economic and environmental risks.

• The report proposes six complementary pathways to green Aid for Trade (A4T): mainstreaming environmental considerations in planning, securing new and additional financing, improving monitoring systems to capture environmental impacts, integrating trade into existing climate and environment funding, strengthening South-South cooperation, and fostering coherence between A4T and wider financial mechanisms such as climate finance and debt relief.
• There is a significant discrepancy in how environment-related A4T is reported; while the share of A4T targeting Rio Conventions as a principal or significant objective rose from 20% in 2007 to 40% in 2014, a preliminary OECD review suggests that fewer than 2% of A4T projects have a clear environmental purpose.
• Developing countries face a 'double exposure' to economic and environmental risks, including commodity price volatility, climate change, and desertification, which complicates their ability to recover from the COVID-19 pandemic and transition to sustainable production.
• The report highlights the importance of debt relief as a tool for sustainable trade, arguing that debt-for-nature or debt-for-climate swaps could free up national resources for environmental protection and reduce the pressure to engage in unsustainable natural resource extraction to generate export revenues.
• A significant trade finance gap exists for developing countries, estimated to have grown to between USD 2.5 trillion and USD 5 trillion for the post-COVID recovery period up to 2025, which hinders the ability of MSMEs to participate in green value chains.
• The report emphasizes that for A4T to be effective, developing countries must be 'in the driver's seat' regarding the prioritization and coordination of assistance to ensure it aligns with their national sustainable development priorities.
• The document identifies specific thematic priorities for green A4T, including investing in sustainable and resilient infrastructure, promoting circular economies, tackling plastic pollution, and supporting the 'blue economy' and sustainable fisheries.
• The report notes that developed countries' consumption often 'offshores' environmental footprints to developing countries, reinforcing the argument for enhanced environmental financing and A4T based on the principle of 'common but differentiated responsibilities and respective capacities' (CBDR-RC).

APA

Birkbeck, C. D. (2022). Greening Aid for Trade and Sustainable Development. International Institute for Sustainable Development. https://www.iisd.org/system/files/2022-07/greening-aid-trade-financing-just-transition.pdf

Chicago

Birkbeck, Carolyn Deere. Greening Aid for Trade and Sustainable Development. International Institute for Sustainable Development, 2022. https://www.iisd.org/system/files/2022-07/greening-aid-trade-financing-just-transition.pdf.

Wikipedia

{{cite report |last1=Birkbeck |first1=Carolyn Deere |title=Greening Aid for Trade and Sustainable Development |publisher=International Institute for Sustainable Development |date=July 2022 |url=https://www.iisd.org/system/files/2022-07/greening-aid-trade-financing-just-transition.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{birkbeck2022greening, author = {Birkbeck, Carolyn Deere}, title = {{Greening Aid for Trade and Sustainable Development}}, institution = {International Institute for Sustainable Development}, year = {2022}, month = jul, url = {https://www.iisd.org/system/files/2022-07/greening-aid-trade-financing-just-transition.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }