02 Oct 2018 Story Green economy

Why trade can save the planet, if we do it better

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by Erik Solheim

In the Indian tech hub of Hyderabad, I recently visited an ultra-modern campus that is home to some of the country’s youngest and brightest minds who crank out code as part of the software outsourcing revolution. The campus itself is a world of wonders – an oasis of cutting-edge environmentalism coupled with state-of-the-art technology.

The site is powered by rows of solar panels, built in China, with back-end technology and cabling from Australia, India, the United States and the European Union. It’s paired with a biogas plant built from parts far and wide. It’s one of the business, tech and green success stories of India’s economy, and it is producing a generation of Indian engineers who are building new skills in large-scale renewables deployment or in the kind of district cooling solutions that will feature in the green buildings of the future.

It’s a powerful symbol of how trade and the spread of goods, services and ideas can help unlock the kind of dramatic low-carbon shift we need to make in the global economy. Trade brings cutting-edge technology far and wide, disrupting business-as-usual practices. Trade ensures that technology gets to where it is needed, the newest and most efficient machinery available. More broadly, trade is also one of the most powerful engines for economic growth and poverty reduction.

The 2030 Agenda calls on all countries to use trade to create a more sustainable, inclusive and resilient world. To this end, we must seize the positive momentum of countless win-win ideas and actions springing up all around the world. We need to stop thinking of environment and trade as isolated issues. Instead we must align trade and trade policies with environmental and social objectives.

We need to all speak more about the linkages between trade, environment, resilience and the effect this connection has on people. The problem, however, is that the trade and environment communities often do not see eye to eye and do not interact enough. That’s something UN Environment is working to address.

Earlier this year, Roberto Azevêdo, Director General of the World Trade Organization and myself, launched an initiative to broaden and deepen the dialogue among governments, the private sector and civil society on practical ways to use trade to strengthen the environment and the global economy.

Our aim is to shine a light on opportunities to bring trade and environment closer together, and to highlight the importance of close collaboration between governments, entrepreneurs, investors, scientists, environmental activists, and civil society at large. To kick off this effort, on 2 October UN Environment and the World Trade Organization will host a high-level dialogue on “Making Trade Work for the Environment, Prosperity and Resilience” at the World Trade Organization in Geneva, Switzerland. The event will call for actions from countries, civil society and the private sector to bring trade into closer alignment with a healthier, sustainable, resilient and prosperous world.

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Today we still see far too often trade that drives already unsustainable levels of resource consumption, waste produced and discarded, contributing to surging greenhouse gases, pollution and biodiversity loss. For example, emissions from the transport sector, the backbone of international trade, are growing rapidly and represented, in 2015, around 18% of all man-made CO2 emissions.

Meanwhile recent extreme weather events such as flooding and hurricanes have illustrated the vulnerability of the supply, transport and distribution chains that underpin modern-day trade. These events, as well as natural disasters, failure to mitigate or adapt to climate change and water crises rank among the top five risks in terms of their perceived impact within the next ten years.

To counter these developments, we need trade and environmental governance to reinforce one other and foster resilience. This can amplify good practices, sustainable production and consumption, investments in the environment, and the development of green technologies. In fact, G20 countries could lift their average economic output by up to 2.8 per cent by 2050 through a combination of policies to mitigate climate change and to foster investment in low-emission, climate-proof infrastructure. Coherent trade and environment policies can further support less-developed economies to integrate into green global value chains through open markets.

Trade cannot be a goal in itself. Trade must drive a better, greener and more inclusive future. Our joint initiative with the WTO holds the potential to translate this vision into reality.

To make green products available to all, we need trade policies that promote innovative solutions and reduce tariff- and non-tariff barriers on the import and export of these goods. We need to cut red tape and barriers for trade in sustainable goods and services, including environmentally sound technologies.. We also need trade policies that connect sustainable production with sustainable consumption and promote a broader shift that helps consumers to make better choices.

Global trade governance must evolve and become a true ally of multilateral efforts to protect the environment, including the Paris Agreement. Carbon pricing could serve as a mechanism to reduce the global footprint of trade and to encourage investment in green sectors. The global trading system must also actively contribute to eliminating environmentally harmful practises. New international trade rules on fossil fuel and fisheries subsidies will not only benefit the environment, they will also promote a fairer trading system. Removing fossil fuel subsidies, for example, would raise government revenue by US$ 2.9 trillion, while also reducing global carbon emissions by more than 20 per cent and air pollution-related deaths by 55 per cent. Environmental ministries and action groups should be closely involved in these negotiations.

Collaboration cannot be limited to international rule making or institution -- what about establishing environment and trade committees at the national-level to ensure that trade policies are aligned with environmental goals?

Many important initiatives are already underway: For example, my home country, Norway, is tackling trade in waste. Under a new proposal, plastic would be added to the list of wastes subject to controls under the Basel Convention – effectively treating it as hazardous. Meanwhile, China is already eliminating plastic waste imports, halting one of the outlets for our unsustainable use of the material and contributing to a more circular economy.

One thing is clear – our government policies, individual actions and trade practices that promote environmentally sound technologies and spur innovative solutions will determine the future viability of our planet. We can and must do better.

 

To learn more about the Environment and Trade Hub, please contact

To learn more about the high-level dialogue, Making Trade Work for the Environment, Prosperity and Resilience please click here