Are trade agreements good or bad for the climate?

Regional trade deals are often met with negativity by green groups because of potential contradictions with climate policy. And some World Trade Organization (WTO) rules may be seen as hampering emission reductions.

But rather than focusing solely on what is wrong with the trade system, the debate should also focus on how governments could try to shape trade agreements to meet the goals of the Paris Agreement.

In our recent report for the Climate Strategies network we have analysed a number of options. Governments could ensure climate objectives are considered a legitimate departure from trade rules. They could also agree to facilitate trade in climate-friendly goods and services. And they could strengthen transparency on climate-related trade measures.

There are legitimate concerns about the Trans-Pacific Partnership (TPP), the Comprehensive Economic and Trade Agreement (CETA) and the Transatlantic Trade and Investment Partnership (TTIP), particularly on investor-state dispute settlement systems.

Yet regional trade agreements can also include provisions on climate and environmental protection. Trade deals between industrialized countries often focus on reducing regulatory costs by aligning standards, as tariff rates are already low. So these trade deals do have the potential to diffuse climate protection rules more widely, which would prevent the regulatory race to the bottom that many environmental organizations fear.

Source: Carbon Brief, UK