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Towards a Trade Regime that Works for the Paris Agreement
Achieving the goals of the Paris Agreement on climate change requires support from the international trade system. The ways in which international trade policy could support climate policy, including legal changes at the World Trade Organization, procedural changes in institutions and practices, and use of plurilateral and regional trade agreements, are examined here. While it may be difficult to agree upon the legal changes, the procedural changes and plurilateral and regional agreements offer a clear way forward in the short to medium term.
This article is part of the Climate Strategies’ project, “Making the International Trading System Work for Climate Change,” funded by K R Foundation. Views expressed here are personal.
The authors are grateful to the anonymous reviewers for providing valuable comments on earlier drafts of this article.
The adoption of the Paris Agreement on climate change in December 2015, followed by a detailed rule book for its implementation in December 2018 in Katowice, ushered in a new era of multilateral cooperation under the United Nations Framework Convention on Climate Change (UNFCCC). The new regime confirms the transition towards a more bottom-up architecture for international climate cooperation, centred around a system of national climate pledges called nationally determined contributions (NDCs). These NDCs, however, differ widely in ambition, nature, and scope, and in absence of strong centralised enforcement, will likely face uneven implementation. Moreover, even if all nations deliver on their promises, current pledges will not keep global warming “well below 2° Celsius above pre-industrial levels,” the limit specified in the Paris Agreement (UNFCCC 2016). The question then is how to strengthen actions so that emissions drop sharply once the Paris framework takes effect in 2020. This will require considerable reductions of fossil fuel use, widespread improvements in energy efficiency, a significant scale-up in the production of renewable energy, and enhanced access to clean energy technologies. Advancing such a multipronged agenda calls for unprecedented efforts across all areas of socio-economic activity. It also requires support from other international regimes, as rules that are working at cross-purposes may hamper climate action.
Role for Trade
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