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This research paper proposes 'transition compacts'—negotiated, sector-specific packages bundling trade disciplines, investment, technology transfer, and transition timelines—as a more equitable alternative to the current patchwork of unilateral green industrial policies and carbon border adjustments. The author argues that existing frameworks, including the WTO and Just Energy Transition Partnerships (JETPs), suffer from structural flaws or a lack of binding equity provisions, whereas transition compacts would link market access to verified emissions performance and binding support for developing nations.

This briefing by the International Institute for Sustainable Development (IISD) examines the intersection of international trade and climate policy ahead of COP 30. It focuses on the use of trade tools—such as border carbon adjustments, green subsidies, and deforestation-free import rules—to advance climate goals while highlighting the risks of market fragmentation and the potential for these measures to deepen inequities between developed and emerging economies.