The World Trade Organization (WTO) asserts that trade can contribute to addressing the challenges posed by climate change. Ralph Ossa, the chief economist of the WTO, noted that while many people associate trade with transportation and emissions, leading them to believe that trade is detrimental to the environment, they often overlook that a significant portion of emissions linked to trade actually comes from production. He pointed out that production emissions vary considerably across different countries.
Ossa explained that trade could be beneficial if it permits sourcing from more environmentally friendly origins, making it part of the solution to climate-related issues. He highlighted the WTO’s initiatives aimed at tackling climate change, particularly in nations like Fiji and other Pacific island states in the context of trade.
The WTO has researched how a shift towards sustainable economies, potentially guided by measures such as a carbon tax, will lead countries to specialize based on not only their economic advantages but also their environmental benefits. Ossa encouraged countries to assess their low-emission industries and consider how to leverage these for competitive advantage in a more sustainable future.
According to the World Trade Report 2024, climate change is already negatively impacting economic growth prospects in the most vulnerable economies, including least developed countries, small island developing states, and landlocked developing economies. These regions have limited resources to recover from natural disasters and their populations are acutely affected by changes in rainfall patterns.