By Sharon Atieno

With international trade accounting for 20-30% of global carbon dioxide emissions, the sector has tremendous potential to lower emissions and contribute to the Paris Agreement of keeping temperatures below 1.5 degrees Celsius.

Recognizing this potential, for the first time ever, the trade aspect is going to feature in the United Nations Climate Change Conference of Parties (COP)- an annual meeting where UN Member States convene to assess progress in dealing with climate change and make a plan for climate action. This year, the 28th COP is scheduled to be held in Dubai, United Arab Emirates(UAE) from 30th November.

The COP 28 Presidency working in partnership with government agencies and other international organizations will host a Trade Day as part of the main programmes at the meeting, Dr. Thani Al Zeyoudi, UAE State Minister for Foreign Trade said during a session at the World Trade Organization (WTO) Public Forum.

These organizers include WTO, the United Nations Conference on Trade and Development (UNCTAD), the International Chamber of Commerce (ICC), the World Economic Forum and the Abu Dhabi Economic Department.

Dr. Al Zeyoudi said one of the main focus of this Day will be how trade can contribute to reducing carbon footprint.

He observed that there is a strong link between trade and climate change, noting that there is a widespread need for green investment which can only be achieved by ensuring supply of the essential commodities and equipment.

Many renewable energy projects slowed down during the pandemic because they couldn’t get access to the right commodities and equipment as a result of countries closing their borders, he noted, adding that supply chains are critical in green investment.

Dr. Al Zeyoudi said this is one of the focus areas of the Trade Day, including ways of ensuring industries produce sustainably with minimal pollution and digitalization of trade to reduce carbon footprint among others.

Dr. Ngozi Okonjo-Iweala, WTO’s Director General said during COP 28, the organization will release several policies showing how trade can be used to drive low carbon emissions.

“We will suggest very specific policies that governments can adopt and incorporate into their National Determined Contributions (NDCs) or plans that will help them to deliver on net zero,” she said.

One of the key messages WTO is going to drive at COP 28 is that the world is not going to achieve its climate objective without trade, because an open market encourages more efficiency, specialization and dissemination of innovations geared towards limiting carbon emissions among other benefits.

The 2022 World Trade Report shows that trade reduces greenhouse gas emissions by enabling access to cutting-edge climate technologies; incentivizing innovation in low-carbon technologies by expanding market size; and fostering competition and scale economies that help drive down costs.

The report finds that trade and value chains have been major factors in the fall in the cost of generating solar and wind energy, making renewable energy now cheaper than fossil alternatives in some places, thus driving their uptake.

Additionally, WTO simulations suggest trade could help speed up the low-carbon transition by eliminating tariffs and reducing non-tariff measures on a subset of energy-related environmental goods. This could boost exports by 5 percent by 2030, while the resulting increases in energy efficiency and renewable uptake would reduce global emissions by 0.6 per cent.

This would also contribute to job creation, with one estimate showing that the global shift to clean energy will generate as many as 30 million new jobs in clean energy and related sectors by 2030.