The World Trade Organization (WTO) asserts that trade can play a significant role in addressing challenges related to climate change. According to WTO chief economist Ralph Ossa, many people associate trade primarily with transportation and emissions, leading them to believe that trade is detrimental to the environment. However, he emphasized that a substantial portion of emissions tied to trade stems from production processes, which can vary greatly between countries.
Mr. Ossa noted that trade could serve as a solution by enabling countries to source goods from more environmentally friendly origins. He elaborated on the WTO’s commitment to tackling climate change, particularly in Fiji and other Pacific island nations, highlighting ongoing research that demonstrates trade’s potential as a constructive force in this context.
He further explained that as the global economy shifts towards more sustainable practices—possibly influenced by policies like carbon taxes—countries will likely start to focus not only on their economic advantages but also on environmental factors that affect their production methods. Countries aiming for a sustainable future should identify industries with lower emissions as a means to gain a comparative advantage.
The World Trade Report 2024 indicates that climate change is already impacting the economic growth trajectories of the most vulnerable economies, including least developed countries, small island developing states, and landlocked developing nations. These regions often lack the resources to recover from natural disasters and face increased susceptibility to changing weather patterns.