Trade policies discussed as a key driver for clean energy at Trade and Environment Week

High-level event

WTO Director-General Ngozi Okonjo-Iweala, in her prepared opening remarks at the high-level event on 9 October, underlined the necessity to triple renewable energy production, and to double energy efficiency by 2030 in order to remain on track with the Paris Agreement on climate change She added: “We are at a pivotal moment where trade policies have become a powerful catalyst for environmental sustainability and offer a versatile set of tools for people-oriented clean energy transition.”

The DG noted that, for example, adjusting current tariff imbalances that favour higher-carbon goods over renewable energy equipment could lower costs and promote greater adoption of low-carbon technologies, while addressing fossil fuel subsidies could spur innovation and curb emissions. Trade policy action can be harnessed towards aligning standards and certification processes to ensure a stable policy framework necessary for the deployment of renewable energy, including in developing economies that have abundant resources but face high project execution risks and financing costs.

United Nations Environment Programme (UNEP) Executive Director Inger Andersen, in a video message, emphasized the urgency of addressing climate change and the severe consequences of rising temperatures, saying that: “We know that greenhouse gas emissions must fall, fall fast, and never rise again.” She stressed the importance of renewable energy to counter climate change and called for responsible, circular approaches to using critical minerals.

“Simply ramping up without circularity will not work,” she stated, underlining the necessity for trade policies that promote responsible mining, protect local communities and ensure that the benefits of these resources are shared across the value chain.

Celeste Saulo, Secretary-General of the World Meteorological Organization (WMO), stated: “Climate information should be part of every policy related to green energy transition.” She highlighted that energy generation, particularly from solar, wind and hydropower sources, is highly dependent on weather and climate, and noted that “a coordinated international effort to share climate data, facilitate technology transfer and build climate-resilient infrastructure will be critical” to ensure the reliability and sustainability of renewable energy systems worldwide.

Francesco La Camera, Director-General of the International Renewable Energy Agency (IRENA), emphasized the urgency of aligning trade policies with the clean energy transition and said the current pace of change is insufficient to meet global climate targets. He noted that although renewable energy has become the most competitive source of electricity worldwide, “the market is still designed for fossil fuels”.

Mr La Camera called for immediate reforms, including lowering tariffs on renewable energy technologies and establishing international standards for environmental goods and services. “If we don't change rapidly the way we produce and consume energy, the next two COPs will be the last chance to keep the 1.5°C target alive,” he warned.

Speaking on the vital connection between trade and environmental policies, Ambassador Sofía Boza of Chile stated: “Trade policies and environmental policies not only can co-exist, but must complement each other to achieve our sustainability goals.”

Ambassador Boza underscored the role of trade in facilitating access to essential technologies for clean energy, asserting that “the energy transition offers a significant opportunity to diversify the productive base while creating added value in exports.” She called for extensive international cooperation, including within the WTO, to overcome challenges and enhance capacity for innovation in developing economies as they pursue sustainable growth.

The founder of the Solar Impulse Foundation, Bertrand Piccard, underscored that the energy transition must be framed as a modernization effort and not merely as a decarbonization challenge. He emphasized the economic benefits of improving energy efficiency, stating: “If we double down on energy efficiency, we save money, we have higher margins of profit, which means it is appealing for the economy.”

Mr Piccard highlighted that renewable energy is now the cheapest source of power, and that energy efficiency drives cost savings, making the transition not just environmentally necessary, but financially smart.  

Highlighting the critical intersection of trade, development and climate, particularly in Asia, Bruce Gosper, Vice President at the Asian Development Bank, stressed that transitioning from carbon-based power requires an “immense change to our societies and economies” and a coordinated global effort.

Mr Gosper underlined the need for action to reduce barriers to environmental goods and services. He emphasized the need for resilient supply chains and the importance of knowledge-sharing and technology transfer to support green investments, noting that collaboration across sectors is essential for success.

Lord Adair Turner, Chair of the Energy Transition Commission, talked about the need for balanced trade policies to support the clean energy transition. He warned that although technological advances have rendered the shift to renewable energy achievable, rising geopolitical tensions and protectionism pose significant challenges.

Poorly designed tariffs and restrictions could “significantly increase the cost of the energy transition and delay progress,” he noted while underlining the need for thoughtful, time-limited trade measures that promote investment and global cooperation to accelerate the path to net-zero emissions.

The high-level panel, which was moderated by Aik Hoe Lim, Director of the WTO Trade and Environment Division, concluded with remarks from the Chair of the WTO Committee on Trade and Environment (CTE), Ambassador Erwin Bollinger of Switzerland, who emphasized the committee's role in fostering multilateral cooperation to align trade policies with international climate goals, including through its thematic sessions on the topic.

Throughout Trade and Environment Week, side events organized by WTO members focused on a wide array of topics, including plastics pollution, critical minerals, sustainable agriculture, the United Nations Sustainable Development Goals (SDGs), voluntary sustainability standards, calculating embedded emissions, environmental goods and services, renewable energy, nature-positive trade and trade-related climate measures.

The WTO Atrium showcased several events during the week, including an exhibition featuring sustainable products and art projects with an environmental angle, and a talk with the author Chris Goodall about his latest book, “Possible: Ways to Net Zero”.

The video recording of the high-level event is available here. The week's programme is available here.

Committee on Trade and Environment

Trade and Environment Week included meetings of the WTO Committee on Trade and Environment on 7 and 11 October.

Japan introduced a new proposal on trade-related climate measures, focusing on facilitating discussions around methodologies for measuring the carbon emissions embedded in a given product or service. Several members welcomed Japan's proposal, calling it a timely and concrete step forward in the dialogue on trade-related climate measures. Members also had a follow-up discussion on India's previously submitted proposal on the role of technology transfer for environmental solutions.

Members also received updates on advances made in the environmental initiatives: the Dialogue on Plastics Pollution and Environmentally Sustainable Plastics Trade (DPP), the Fossil Fuel Subsidy Reform (FFSR) initiative, and the Trade and Environmental Sustainability Structured Discussions (TESSD).

The United Nations Framework Convention on Climate Change (UNFCCC) briefed members on preparations for the upcoming COP29 UN Climate Change Conference to be held in Baku, Azerbaijan from 11 to 22 November 2024. This was followed by a WTO briefing on the Secretariat's preparations for the event. These include a number of WTO publications for COP29, the Climate Finance Investment and Trade (FIT) Day, which will be held on 14 November in Baku, and the WTO-supported Trade and Investment House, which will be hosted at COP29 for the duration of the event.

UN Trade and Development (UNCTAD) also provided an update on the first ever Trade Day that will take place at the 16th meeting of the Conference of the Parties to the UN Convention on Biological Diversity (COP16), to be held from 21 October to 1 November in Cali, Colombia.  

The Committee also held its third thematic session on the topic of trade-related climate measures. The aim of the session was to enhance understanding by mapping the landscape of these measures, highlight key elements and facilitate dialogue on how the WTO can support better understanding and interoperability of these measures.

New Zealand and the Philippines, the co-facilitators of the session, reported to the Committee that members benefitted from the expertise shared across the session's three panels as they work to achieve their climate objectives.

The date of the next Committee meeting will be communicated in due course.

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