Trade and Climate Change in the World Trade Organization

This policy brief examines the intersection of international trade and climate change, specifically focusing on how the World Trade Organization (WTO) can facilitate cooperation to support climate mitigation and adaptation goals while ensuring a just transition for developing countries.

• Trade has a dual impact on climate change: it can exacerbate emissions through unsustainable production and consumption patterns, but it is also essential for scaling the diffusion of climate-friendly technologies and offsetting production shortfalls caused by extreme weather.
• Consumption-based accounting reveals that countries reducing territorial emissions often become net importers of emissions, with some importing 6–30% of their territorial emissions; conversely, some exporters generate up to 50% of their emissions for export markets.
• International shipping and aviation accounted for approximately 2 billion tonnes of CO2 in 2019, or roughly 5% of global emissions, with two-thirds of these being international and thus not reported to the UNFCCC.
• Governments can use various trade-related tools to support climate goals, including border measures (like carbon taxes or border carbon adjustments), economic incentives (such as removing fossil fuel subsidies), and regulatory measures (including green government procurement and mandatory energy efficiency standards).
• WTO rules generally allow for good faith environmental policies provided they do not constitute arbitrary discrimination or disguised restrictions on trade. Past disputes have often focused on local content requirements rather than the environmental legitimacy of the policies themselves.
• The Trade and Environmental Sustainability Structured Discussions (TESSD), co-sponsored by 74 members including the US, China, and the EU, serves as a deliberative space to explore how trade-related climate measures can contribute to climate goals while remaining consistent with WTO rules.
• A separate member-led initiative on Fossil Fuel Subsidy Reform, with 47 co-sponsors, seeks to achieve disciplines on inefficient fossil fuel subsidies that encourage wasteful consumption.
• To ensure a just transition, the document emphasizes the need for international support for developing countries, including capacity building via the Aid for Trade Initiative, technology transfer, and the removal of non-tariff barriers to environmental goods.
• The author proposes three potential paths for multilateral progress: pursuing binding market access and rules, agreeing on a 'climate waiver' or 'peace clause' to avoid disputes over non-discriminatory trade-restrictive measures, or establishing non-binding 'soft law' principles and guidelines.

APA

Bellmann, C. (2022). Trade and Climate Change in the World Trade Organization. Forum on Trade, Environment, & the SDGs. https://lyrical-cormorant.files.svdcdn.com/production/assets/images/Publications/TESS-Policy-Brief-Trade-and-Climate-Change-in-the-World-Trade-Organization.pdf?dm=1695371690

Chicago

Bellmann, Christophe. Trade and Climate Change in the World Trade Organization. Forum on Trade, Environment, & the SDGs, 2022. https://lyrical-cormorant.files.svdcdn.com/production/assets/images/Publications/TESS-Policy-Brief-Trade-and-Climate-Change-in-the-World-Trade-Organization.pdf?dm=1695371690.

Wikipedia

{{cite report |last1=Bellmann |first1=Christophe |title=Trade and Climate Change in the World Trade Organization |publisher=Forum on Trade, Environment, & the SDGs |date=November 2022 |url=https://lyrical-cormorant.files.svdcdn.com/production/assets/images/Publications/TESS-Policy-Brief-Trade-and-Climate-Change-in-the-World-Trade-Organization.pdf?dm=1695371690 |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{bellmann2022trade, author = {Bellmann, Christophe}, title = {{Trade and Climate Change in the World Trade Organization}}, institution = {Forum on Trade, Environment, \& the SDGs}, year = {2022}, month = nov, url = {https://lyrical-cormorant.files.svdcdn.com/production/assets/images/Publications/TESS-Policy-Brief-Trade-and-Climate-Change-in-the-World-Trade-Organization.pdf?dm=1695371690}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }