Trade, Climate, and Net Zero Pathways: Scenarios and Implications for Developing Countries and Climate-Resilient Development

The document provides a comprehensive analysis of how the transition to net-zero emissions affects nine global sectors: agriculture, carbon markets, critical minerals, digital transformation, energy transition, fisheries, heavy industries, shipping, and textiles and garments. It examines the intersection of trade policies and climate action, highlighting the risks of 'green protectionism' and the potential for developing countries to capture new economic opportunities through value addition and green industrialization. The reports emphasize the need for international cooperation to ensure a just transition, particularly for least developed countries (LDCs) and small island developing states (SIDS).

• Agriculture is both a major contributor to global warming and a critical sector for adaptation, with food systems contributing more than a third of global greenhouse gas (GHG) emissions in 2022.
• Climate change is projected to significantly increase food insecurity, with nearly 500 million people estimated to remain at risk of hunger by 2050, including an additional 28 million in East and Southern Africa.
• Mandatory carbon pricing revenues reached a record $104 billion in 2023, though most current prices remain too low to meet Paris Agreement goals.
• Voluntary carbon markets have faced a crisis of confidence due to 'greenwashing' and claims that over 90% of credits from the largest certifier, Verra, were 'worthless'.
• Demand for critical minerals is expected to double or quadruple by 2040, with China dominating the processing of graphite, rare earths, cobalt, and lithium.
• The 'twin transition' of digital and green transformations offers efficiency gains but also introduces new environmental costs, with the ICT sector contributing between 1.4% and 4% of global GHG emissions.
• The energy transition requires a massive shift in global energy supply, with fossil fuels needing to drop from 80% to 16% of the global energy supply to meet the IEA's Net Zero Emissions by 2050 Scenario.
• Global fish catches are projected to decline by 3–25% by 2050, with tropical developing regions expected to experience the most severe reductions.
• Heavy industries like steel, aluminium, and cement account for roughly 17–20% of global GHG emissions and are characterized by 'lumpy' investment cycles of 20–50 years.
• The International Maritime Organization (IMO) targets net-zero GHG emissions for shipping by or around 2050, but the transition faces a significant cost gap between zero-emission fuels and fossil fuels.
• The global fashion industry is estimated to be responsible for up to 10% of annual global carbon emissions, with production in hubs like Bangladesh, Cambodia, Pakistan, and Vietnam highly vulnerable to climate shocks.
• Developing countries face the risk of 'green protectionism' through measures like the EU's Carbon Border Adjustment Mechanism (CBAM), which may impose disproportionate burdens on their exports.

APA

Forum on Trade, Environment, & the SDGs (2025). Trade, Climate, and Net Zero Pathways: Scenarios and Implications for Developing Countries and Climate-Resilient Development. https://lyrical-cormorant.files.svdcdn.com/production/assets/images/Publications/TESS-Compilation-Net-Zero-Series-WEB-version.pdf?dm=1761643621

Chicago

Forum on Trade, Environment, & the SDGs. Trade, Climate, and Net Zero Pathways: Scenarios and Implications for Developing Countries and Climate-Resilient Development. 2025. https://lyrical-cormorant.files.svdcdn.com/production/assets/images/Publications/TESS-Compilation-Net-Zero-Series-WEB-version.pdf?dm=1761643621.

Wikipedia

{{cite report |author=Forum on Trade, Environment, & the SDGs |title=Trade, Climate, and Net Zero Pathways: Scenarios and Implications for Developing Countries and Climate-Resilient Development |date=September 2025 |url=https://lyrical-cormorant.files.svdcdn.com/production/assets/images/Publications/TESS-Compilation-Net-Zero-Series-WEB-version.pdf?dm=1761643621 |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{forumontradeenvironmentthesdgs2025trade, author = {{Forum on Trade, Environment, \& the SDGs}}, title = {{Trade, Climate, and Net Zero Pathways: Scenarios and Implications for Developing Countries and Climate-Resilient Development}}, institution = {Forum on Trade, Environment, \& the SDGs}, year = {2025}, month = sep, url = {https://lyrical-cormorant.files.svdcdn.com/production/assets/images/Publications/TESS-Compilation-Net-Zero-Series-WEB-version.pdf?dm=1761643621}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }