Securing a Just and Inclusive Global Green Economy Through Trade Policy

The briefing note argues that trade policy should avoid creating a "two-speed global economy" by balancing regulatory requirements ("sticks") with support measures ("carrots"). It suggests that WTO members adopt principles from international environmental law—such as Common but Differentiated Responsibilities (CBDR)—and employ a data-driven diagnostic process to identify specific barriers to green transitions across different commodities and levels of development.

• Leading developed economies, specifically Canada, the European Union, the United Kingdom, and the United States, utilize a combination of regulatory "carrots and sticks" to manage their internal green transitions. This approach pairs demanding environmental requirements with flanking measures like support for green innovation to ensure the transition is socially and economically inclusive.
• The European Union serves as a primary example of a just transition through various funding mechanisms: the Innovation Fund (€25 billion) for clean energy, IPCEIs (€6.1 billion) for sustainable batteries, the Modernization Fund (€14 billion) for 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 mitigate carbon pricing impacts on vulnerable groups.
• 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 established environmental principles, such as those found in the Rio Declaration, Agenda 21, the UNFCCC, and the Paris Agreement, when designing trade policies.
• Core principles from international environmental law that should guide trade policy include the preference for multilateral cooperation, the recognition that environmental standards should reflect a country's developmental situation, and the principle of "common but differentiated responsibilities and respective capacities (CBDR)."
• To avoid unilateral actions that impose unwanted social costs on developing countries, the document asserts that trade restrictions should not be used to offset cost differences resulting from varying environmental standards, nor should they constitute arbitrary discrimination or disguised restrictions on trade.
• The authors propose a two-step, data-driven approach to develop trade policy: first, diagnosing barriers to transition for highly-traded agricultural and industrial commodities across diverse member types (including least developed and small island states); and second, identifying tailored policy mixes of carrots and sticks to overcome those specific barriers.

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} }