Imperial College London

New international trade agreements could benefit green industries, say experts


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Trade can help tackle climate change, by increasing demand for green products and giving more people access to clean energy technologies.

This is according to a panel of experts, who spoke to policymakers at the World Trade Organisation (WTO) last week about how favourable international agreements could benefit the environment and help industries with green credentials to prosper.

They highlighted a key role for predictable, long-term policies, international standards for energy use in manufactured goods and services, tax incentives, and the removal of restrictions that hinder a growing trade in renewable energy and low-emission technologies.

On 29 June in Geneva, Switzerland, an audience of around 100 people, including participants on the WTO's annual advanced course on trade and environment, listened to speakers convened by the WTO and the Grantham Institute – Climate Change and the Environment, a global challenge institute of Imperial College London.

"It is hugely important that the trade community engages with climate scientists and policy makers on what needs to be done," Professor Joanna Haigh, Grantham Institute co-director, said in her keynote address.

Professor Haigh stated her concern for the continuing rise in the concentration of greenhouse gases like carbon dioxide in the atmosphere, despite international agreement to limit their emission.

“Actions meant to help populations merely adapt to climate change are not enough, nor are commitments countries have made in the form of nationally determined contributions in the Paris Agreement for climate action,” she said.

“Instead, more steps need to be taken to cut carbon emissions.”

Opening the panel discussion, WTO Trade and Environment Division Director Aik Hoe Lim noted how the removal of tariffs and other trade restrictions affecting imports of goods and services could encourage the uptake of effective green technologies.

He also highlighted that small- and medium-sized businesses could particularly benefit from the increase in trade, but warned that their participation could be hampered by the wide range of standards and technical regulations that currently exist between different countries and regions.

Stefaan Simons, the Dean of the College of Engineering, Design & Physical Sciences at Brunel University, called on participants to consider removing restrictions that hinder use of resource-efficient, low carbon technologies, including those that incorporate recycled materials and can be either easily repaired or remanufactured. Tax incentives, he added, could also help.

Grantham Institute project manager Dr Laila Read talked about renewable energy technologies like solar and wind power. In this area, she said, international trade could open up new markets for products and their components, and allow manufacturers to share knowledge and create new international standards.

She called for policymakers to support plans to connect renewable energy sources to existing power grids. For example, new technologies that are capable of storing large quantities of energy produced at times when it is in surplus could then be used when demand exceeds supply.

Assaad Razzouk, Group Chief Executive of Sindicatum Sustainable Resources, injected a private sector view to the discussion. Clean energy solutions, he said, face difficulties in the form of competition posed by subsidised fossil fuels, as well as ‘bureaucratic tangles’ that hamper investment.

Pakistan Ambassador to the WTO, Syed Tauqir Shah, highlighted the situation of developing countries, stating that clean energy approaches must also take into consideration the energy consumption needs of poorer countries and their growth and development objectives.

"We have to align trade and climate agreements so trade becomes a driver for low-carbon growth," he said.

WTO IP Counsellor Jayashree Watal told the audience that several developing countries are among the main owners and users of patented clean energy technologies, such as China’s dominance in solar thermal energy generation technology. 

She also said that under the 2015 Paris Agreement for climate change, developed and developing nations are encouraged to work together on technology that can curb the growth in carbon dioxide emissions.

Mr Lim, closing the event, likewise said: "What we heard today is that trade is already helping to roll out clean energy technologies. However, in many cases, trade policy can do more to move things in the right direction."


Simon Levey

Simon Levey
The Grantham Institute for Climate Change

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Climate-change, Energy, Strategy-decision-makers, Sustainability
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