UNFCCC

Crafting a Climate Trade Agreement (CTA)

Crafting a Climate Trade Agreement (CTA)

Part of the problem is that the entire policy landscape for managing sustainable trade with a focus on climate or environment remains at an early stage. Climate has been managed by officials through the UN Framework Convention on Climate Change (UNFCCC). Trade officials, agencies or ministries may participate, but are not driving the agenda. Many of the ideas circulating to address climate and trade are quite new as well. It isn’t entirely clear, as an example, what sort of trade implications will come from the growing use of carbon border adjustment taxes. The trade consequences of green subsidies are likely to be significant, but uncertain. There are some elements of a trade and climate agenda with more consensus, including the potential inclusion of clauses on pollution or managing endangered species. Some trade agreements include commitments to sign on and implement a variety of climate-related international treaties and conventions. The critical importance of the “climate and trade” agenda is clearly crying out for a suitable response. Yet existing mechanisms for delivering results seem limited. Adding climate to trade agreements, as noted above, tends to be unsatisfactory. Asking global or regional institutions to manage any possible trade-related fallout from climate actions taken by the UNFCCC or others is also problematic. One solution that seems achievable is to create a new style of trade agreement, the CTA. It could pull out the most useful and innovative element of a digital counterpart, the DEPA.