The World Trade Organization (WTO) asserts that trade can play a crucial role in addressing the challenges posed by climate change. WTO chief economist Ralph Ossa pointed out that while many people associate trade with transportation and emissions, which leads them to believe that trade harms the environment, they often overlook that a significant portion of trade-related emissions originates from production processes. He noted that the emissions from production can vary greatly between countries.
Ossa emphasized that trade could contribute positively to the environment by enabling countries to source goods from more sustainable suppliers. He mentioned that the WTO is actively exploring how trade can be a vital component of solutions to climate change, particularly in reference to its work in Fiji and other Pacific island nations.
He further explained that as the global economy shifts toward sustainability—potentially guided by policies such as a carbon tax—countries will begin to specialize not only based on economic strengths but also on environmental advantages. This means countries should identify their low-emissions industries and leverage them to gain a comparative edge.
The World Trade Report 2024 highlights that climate change is already threatening economic growth in vulnerable economies, including least developed countries (LDCs), small island developing states (SIDs), and landlocked developing nations, which lack the resources to recover from natural disasters and are particularly vulnerable to changes in rainfall patterns.