The head of the World Trade Organization urged envoys at the COP28 climate conference to put trade policy at the forefront of the fight against global warming.
Delegates from more than 190 countries are meeting in Dubai to discuss ways to make good on global climate goals, and support initiatives to tackle methane emissions, accelerate renewables and accelerate the shift away from coal.
The role of trade has now to come into focus, according to WTO Director-General Ngozi Okonjo-Iweala.
“We’re still warming and if we keep going the way we are we will never hit the target,” she says in an interview. “But there’s still a chance and that’s why we’re thinking we need to highlight the role of trade now to make people realise that free, open and predictable trade is an essential part of the tool kit for getting to net zero.”
Measures that governments could take include adjusting tariffs to incentivise renewables, greening procurement rules or redesigning the current system of subsidies for fossil fuels and agriculture that harm the environment and distort trade.
“Why are we looking for climate finance everywhere while we can repurpose some of these subsidies, if not all, to finance developing countries who are looking for that money to get through the just transition?” says Okonjo-Iweala, who took office in March 2021 as the first woman and the first African to serve as WTO Director-General.
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Okonjo-Iweala also says less-developed members of the WTO are raising concerns over the European Union’s carbon border tax, which entered its initial reporting stage before it comes into full force in January.
Importers in several emissions-intensive sectors, such as cement and steel, will then be required to pay a gradually phased-in levy, set in line with prices in the EU carbon market.
The EU has taken a “constructive approach” and is due to hold workshops at the WTO this month, where they can listen to the concerns and explain the rules of the mechanism in a bid to avoid trade frictions, according to Okonjo-Iweala, who twice served as Nigeria's Finance Minister.
See also: India aiming to finalise carbon deals with Japan, Singapore
“The WTO is ready to be a forum to facilitate this kind of dialogue [and] solve out the problems rather than let them fester,” she says.
Follow The Edge Singapore’s coverage of COP28 here.
