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How trade policy can support the climate agenda

Around the world, trade measures are being proposed or considered to complement climate policies. Border carbon adjustments are the most prominent ones. The authors argue that policy makers should examine other ways in which trade-related policies can support climate goals, including phase-out of fossil fuel subsidies, clear rules for settling disputes on renewable energy technologies, conclusions of an environmental goods and services agreement, and establishing green materials clubs.

Harro van Asselt, Cleo Verkuijl / Published on 23 June 2022

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Jakob, M., Afionis, S., Åhman, M., Antoci, A., Arens, M., Ascensão, F., van Asselt, H., Baumert, N., Borghesi, S., Brunel, C., Caron, J., Cosbey, A., Droege, S., Evans, A., Iannucci, G., Jiborn, M., Kander, A., Kulionis, V., Levinson, A., … Willner, S. (2022). How trade policy can support the climate agenda. Science 376(6600).

The international trade regime has the potential to restructure market relationships in a climate-friendly manner by providing incentives for climate change mitigation and adaptation. Beyond unilateral policy approaches, the WTO regime offers a series of options to make the trade regime work for the climate. These include agreements that aim to phase out trade-distortive fossil fuel subsidies, removing trade barriers for clean energy technologies, advancing negotiations on an agreement on trade in environmental goods and services and providing a platform for green materials clubs. Unfortunately, up to now this potential has not been exploited by WTO member states.

In view of a swift transition towards a low-carbon world, decision makers should make use of the trade policy options outlined in this contribution in line with their national climate policies.

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SEI authors

Profile picture of Harro van Asselt
Harro van Asselt

SEI Affiliated Researcher


Cleo Verkuijl
Cleo Verkuijl



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Topics and subtopics
Climate : Climate policy
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SEI Oxford

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