Commerce coverage instruments can assist nations enhance low-carbon items uptake by reforming import tariffs, rethinking authorities procurement and selling commerce facilitation, mentioned Director-Common Ngozi Okonjo-Iweala on December 4.
Talking on the launch of “Commerce Day” on the United Nations Local weather Change Convention (COP28) in Dubai, DG Okonjo-Iweala pressured this thematic day ought to encourage world leaders to make fuller use of commerce as a part of the local weather motion toolkit.
WTO is co-leading “Commerce Day” with the United Arab Emirates (UAE) at COP in cooperation with the United Nations Convention on Commerce and Growth (UNCTAD), the Worldwide Chamber of Commerce (ICC), the World Financial Discussion board (WEF) and the Abu Dhabi Division of Financial Growth (ADDED). Opening the day, international leaders addressed learn how to work collectively to advertise a roadmap of commerce coverage choices for a simply and bold response to local weather change.
DG Okonjo-Iweala highlighted that the worldwide neighborhood stays effectively wanting the Paris Agreement targets. She mentioned that the trillions of {dollars} of low-carbon investments wanted to realize these targets at the moment are dealing with larger borrowing prices. Towards that background, she pressured that commerce can assist ship better emission reductions for every greenback spent and repurpose dangerous subsidies to help local weather motion. “The actual fact is, we can’t get to net-zero with out commerce as a result of it’s indispensable for spreading low-carbon expertise to in every single place it’s wanted,” she famous.
“Commerce is about individuals, a device for bettering their lives and their livelihoods, and for selling sustainable improvement as enshrined within the Marrakesh Settlement that arrange the World Commerce Group,” famous DG Okonjo-Iweala in her opening remarks. To ship on that, the WTO has been working to advocate for commerce as a part of the local weather response and to provide analysis and evaluation on the advanced relationship between local weather change and commerce.
She referred to the 10-point set of “Trade Policy Tools for Climate Action”, the brand new WTO publication launched on 2 December that explores how integrating commerce coverage choices, equivalent to reviewing import tariffs on low-carbon options, into nationwide methods can assist economies mitigate the results of local weather change and adapt to its penalties. “We hope that you just discover it helpful as we transfer in the direction of coping with this existential risk that’s local weather change,” she mentioned.
For the primary time, commerce is featured as a particular theme at COP. All through the Convention, a Trade House is internet hosting in-depth discussions on how commerce and commerce insurance policies can assist tackle totally different elements of the local weather problem. The pavilion is hosted by the WTO, ICC, UNCTAD and the Worldwide Commerce Centre (ITC).
The Director-Common centered on three points: reviewing and rebalancing import tariffs, rethinking authorities procurement and facilitating commerce.
On the primary challenge, DG Okonjo-Iweala highlighted that at the moment carbon-intensive items usually face decrease import duties than low-carbon options. “Renewable vitality tools faces common tariffs which might be twice as excessive as these for coal, and low-carbon autos usually face larger tariffs than these for autos working with inside combustion engines. Correcting that might assist enhance the uptake of inexperienced applied sciences,” she mentioned.
Relating to authorities procurement, governments spend round US$ 13 trillion in public procurement yearly, accounting for roughly 13% of world GDP and 15% of world greenhouse fuel emissions. DG Okonjo-Iweala pressured that “by bringing local weather delicate standards equivalent to low-carbon necessities into public tenders, mixed with open competitors in step with the WTO Authorities Procurement Settlement, would additionally assist guarantee worth for taxpayers’ cash.”
On facilitating commerce, she referenced the blocked ports and backed-up border crossings that turned a supply of inflationary strain throughout the pandemic. “By implementing commerce facilitation measures like these set out within the WTO Commerce Facilitation Settlement, issues like encouraging digital documentation and streamlining inefficient customs procedures, nations can assist cut back border management delays and associated vitality consumption. This has led to reductions of as much as 85% of trade-related emissions at sure land border crossings that we’ve monitored,” she mentioned.
“All these points go to the center of delivering a people-centred inexperienced transition, bringing down the price of clear vitality, decarbonizing provide chains, and creating new job and enterprise alternatives within the rising low-carbon economic system,” she added.
The DG’s intervention was adopted by a panel dialogue with the participation of presidency representatives, worldwide organizations and the non-public sector.
Dr Thani Al Zeyoudi, Minister of State for International Commerce of the UAE and Chair of the thirteenth WTO Ministerial Convention (MC13) to be held in Abu Dhabi in February 2024, emphasised the significance of embracing a brand new coverage framework to deal with sustainability points. He mentioned his authorities goals at accelerating sustainable commerce by way of a “carrot and stick” strategy, diversifying the economic system, and superior expertise adoption.
Mr Sultan Ahmed Bin Sulayem, World Chairman of DP, a multinational logistics firm, emphasised the significance of government-private sector collaboration on commerce facilitation, expertise and renewable vitality in ports. He pressured the necessity for a standardized system throughout nations to facilitate commerce and cut back delays, citing Africa’s low inter-country commerce proportion in comparison with developed nations.
Mr John Denton, ICC Secretary Common, shared his perspective on how international firms can adapt to renewable insurance policies and cut back their total footprint on a nation-by-nation foundation, with a give attention to environmental, social and governance (ESG) points, that are more and more vital for companies worldwide. He additionally identified the significance of addressing carbon leakage and guaranteeing that carbon border mechanisms (CBMs) keep away from WTO non-compliant outcomes.
Dr Rebeca Grynspan, UNCTAD Secretary Common, underlined the necessity for a multilateral strategy to keep away from the prevailing “spaghetti bowl” of local weather and atmosphere rules that small and medium-sized enterprises (SMEs) and susceptible nations can’t navigate. She known as on leveraging the chance local weather change and vitality transition present to make sure that growing nations shall be ready so as to add extra worth into their participation in international commerce.
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