Securing a Just and Inclusive Global Green Economy Through Trade Policy

This briefing note by the Forum on Trade, Environment, & the SDGs argues that trade policy should facilitate a 'just and inclusive global green economy' by balancing regulatory requirements ('sticks') with supportive measures ('carrots'). It suggests that WTO members should align trade-related environmental measures with established principles of international environmental law and adopt a data-driven diagnostic approach to identify specific barriers to green transitions across different countries and sectors.

• Leading developed countries, specifically Canada, the European Union (EU), the United Kingdom, and the United States, utilize a combination of regulatory 'carrots and sticks' to manage their internal green transitions. This approach ensures that while companies must meet strict environmental requirements, they receive targeted support to mitigate economic and social consequences.
• The European Union employs several specific financial and regulatory mechanisms to ensure its green transition is just and inclusive. These include the Innovation Fund (€25 billion), the Modernization Fund (€14 billion for 10 lower-income member states), the Just Transition Fund (€17.5 billion for negatively impacted regions), and a proposed Social Climate Fund (€72.2 billion) to alleviate the social impacts of carbon pricing.
• The EU applies differentiated carbon pricing and targets based on sector and economic development. For example, the Emission Trading Scheme (ETS) applies to some sectors but not others, and the Effort Sharing Regulation imposes higher emission reduction targets on member states with higher GDP per capita.
• Trade-related environmental measures are described as 'legal hybrids' that must simultaneously adhere to international trade law and international environmental law. The authors argue that WTO members should not ignore agreed-upon principles of environmental law when designing trade restrictions.
• Core principles from international environmental law that should guide trade policy include the concept of 'common but differentiated responsibilities and respective capacities' (CBDR), the preference for multilateral cooperation over unilateral action, and the recognition that standards appropriate for developed countries may be inappropriate or carry unwanted social costs for developing countries.
• The authors propose a data-driven approach to trade policy instead of 'one-size-fits-all' templates. This involves a two-step process: first, diagnosing barriers to transition for highly-traded agricultural and industrial commodities across various member types (developed, developing, least developed, small island, and landlocked), and second, identifying tailored policy solutions based on those findings.

APA

Lockhart, N., Coppens, D., Connolly, K., & Perantakou, S. (2022). Securing a Just and Inclusive Global Green Economy Through Trade Policy. Forum on Trade, Environment, & the SDGs. https://lyrical-cormorant.files.svdcdn.com/production/assets/images/Publications/TESS-Briefing-Note-Securing-a-Just-and-Inclusive-Global-Green-Economy-Through-Trade-Policy.pdf?dm=1678725335

Chicago

Lockhart, Nicolas, Dominic Coppens, Katherine Connolly, and Stella Perantakou. Securing a Just and Inclusive Global Green Economy Through Trade Policy. Forum on Trade, Environment, & the SDGs, 2022. https://lyrical-cormorant.files.svdcdn.com/production/assets/images/Publications/TESS-Briefing-Note-Securing-a-Just-and-Inclusive-Global-Green-Economy-Through-Trade-Policy.pdf?dm=1678725335.

Wikipedia

{{cite report |last1=Lockhart |first1=Nicolas |last2=Coppens |first2=Dominic |last3=Connolly |first3=Katherine |last4=Perantakou |first4=Stella |title=Securing a Just and Inclusive Global Green Economy Through Trade Policy |publisher=Forum on Trade, Environment, & the SDGs |date=March 2022 |url=https://lyrical-cormorant.files.svdcdn.com/production/assets/images/Publications/TESS-Briefing-Note-Securing-a-Just-and-Inclusive-Global-Green-Economy-Through-Trade-Policy.pdf?dm=1678725335 |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{lockhart2022securing, author = {Lockhart, Nicolas and Coppens, Dominic and Connolly, Katherine and Perantakou, Stella}, title = {{Securing a Just and Inclusive Global Green Economy Through Trade Policy}}, institution = {Forum on Trade, Environment, \& the SDGs}, year = {2022}, month = mar, url = {https://lyrical-cormorant.files.svdcdn.com/production/assets/images/Publications/TESS-Briefing-Note-Securing-a-Just-and-Inclusive-Global-Green-Economy-Through-Trade-Policy.pdf?dm=1678725335}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }