Reducing fragmentation and fostering interoperability in trade-related climate measures

This research paper examines the challenges of fragmentation in trade-related climate measures (TrCMs) and proposes "interoperability" as a mechanism to reduce regulatory burdens on supply chain participants, particularly small and medium-sized enterprises, without requiring full harmonization of policy objectives.

• Trade-related climate measures (TrCMs) are government actions with climate mitigation or adaptation goals that directly or indirectly impact trade policy and flows. Examples include carbon border adjustments, green industrial policy support, and product standards. While these measures address climate externalities, they can create non-tariff barriers to trade by increasing the regulatory burden on foreign supply chain participants.
• Fragmentation occurs when the rules, structures, principles, and objectives of TrCMs differ across jurisdictions or policy domains. This fragmentation multiplies the regulatory burden—specifically the costs of generating, verifying, and reporting information like product "embedded emissions"—which disproportionately disadvantages small and medium-sized enterprises and exporters from smaller domestic markets.
• Interoperability is defined as the ability to pass useful information from one system to another, allowing participants to report information once for multiple markets. Unlike full harmonization, interoperability does not require jurisdictions to agree on emissions threshold values for "clean" goods, thereby preserving policy space while reducing trade distortions.
• Achieving interoperability for product embedded emissions requires the harmonization of specific technical elements. These include emissions factors, the selection of greenhouse gases and global warming factors, emissions accounting boundaries, default values, allocation methods, and chain-of-custody models.
• To prevent further fragmentation, the author suggests aligning TrCMs with international standards. Specifically, ISO 14067 (Product Carbon Footprint Standard), currently being revised with the GHG Protocol, and the IPCC Emissions Accounting Guidelines can provide guardrails for the structure and methods used in emissions accounting.
• The author proposes four strategies to foster interoperability: implementing flexible information systems that can convert raw data into various accounting rules; focusing on sectoral and product-level approaches for high-impact upstream products like steel, aluminium, and concrete; standardizing technical language to avoid jargon; and using a structured "top-down" collaboration approach.
• The proposed "top-down" approach to harmonization organizes alignment into six levels: General Regulatory Objectives, Overarching Principles, Supporting Principles, Framework Structure, Framework Rules, and Product-Specific Rules. This hierarchy helps negotiators move from broad agreement on objectives to specific technical rules.

APA

Aisbett, E. (2026). Reducing fragmentation and fostering interoperability in trade-related climate measures. Forum on Trade, Environment, & the SDGs. https://tessforum.org/latest/reducing-fragmentation-and-fostering-interoperability-in-trade-related-climate-measures

Chicago

Aisbett, Emma. Reducing fragmentation and fostering interoperability in trade-related climate measures. Forum on Trade, Environment, & the SDGs, 2026. https://tessforum.org/latest/reducing-fragmentation-and-fostering-interoperability-in-trade-related-climate-measures.

Wikipedia

{{cite report |last1=Aisbett |first1=Emma |title=Reducing fragmentation and fostering interoperability in trade-related climate measures |publisher=Forum on Trade, Environment, & the SDGs |date=22 June 2026 |url=https://tessforum.org/latest/reducing-fragmentation-and-fostering-interoperability-in-trade-related-climate-measures |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{aisbett2026reducing, author = {Aisbett, Emma}, title = {{Reducing fragmentation and fostering interoperability in trade-related climate measures}}, institution = {Forum on Trade, Environment, \& the SDGs}, year = {2026}, month = jun, url = {https://tessforum.org/latest/reducing-fragmentation-and-fostering-interoperability-in-trade-related-climate-measures}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }