The World Trade Organization (WTO) asserts that trade could play a crucial role in addressing challenges posed by climate change. WTO chief economist Ralph Ossa noted that while many people often associate trade with transport and emissions, leading them to believe it negatively impacts the environment, they overlook an important aspect. He explained that a significant portion of emissions related to trade stems from production, which varies greatly from one country to another.
Ossa emphasized that trade, by enabling countries to source products from more environmentally friendly origins, can indeed contribute positively to environmental solutions. Responding to inquiries about the WTO’s initiatives concerning climate change in Fiji and other Pacific island nations, he stated, “We have extensive documentation showing that trade can actually play a vital role in addressing these issues.”
He further elaborated on the potential for global economic shifts towards sustainability, guided by environmental policies such as a carbon tax. This shift would encourage countries to specialize based not only on their economic strengths but also their environmental advantages. Ossa advised countries preparing for a sustainable future to identify industries with relatively low emissions and leverage this for their comparative advantage.
The upcoming World Trade Report 2024 highlights that climate change is already adversely affecting economic growth prospects in many vulnerable economies, including least developed countries (LDCs), small island developing states (SIDs), and landlocked developing countries, which are least equipped to recover from natural disasters and are particularly susceptible to changes in rainfall patterns.