The WTO is key to international efforts to solve warming and the environment– otherwise, solutions fail

1. A rules-based trade system is needed for climate action The WTO is the backbone for international, rules-based commerce. Sure, its dispute settlement function is . But the organization is still a powerful source of rules and norms for the way countries regulate goods, services and investment moving across borders. Companies appreciate that. In recent debates around the green transition and economic support, or on supply chain resilience, few executives suggest that a rules-based system needs to be upended. There is a general recognition that trade can help the world combat climate change and biodiversity loss, through spreading innovations, generating economies of scale for new technologies, among other things. However, many companies would like to see WTO members work together for more consistency on subsidy rules—including working to phase out fossil fuel subsidies—or to address slow permitting processes for foreign investment in renewable energy projects. These wishes need to be balanced with countries’ interests and debated, and that leads us to the next point. 2. Conversation is helpful The green transition is taking place against a period of geopolitical turbulence. One has not caused the other, but the two are related, and will likely become more intertwined in the future. Further, if not wisely navigated, trade could hinder individual countries’ efforts to combat climate change through offshoring emissions. Equally, the industrial transition needed to combat climate change creates competitive and protectionist dynamics which might also undermine climate action in the long run. The World Economic Forum has mapped four to think through potential trends. According to those consultations around the scenarios, avoiding an “exponential disasters” scenario where climate policies precipitate trade wars — flanked by resource nationalism — can be helped by government discussions in a few areas. One of these is carbon accounting and reporting standards. These have proliferated and may continue to do so, creating an uneven landscape on which countries will inevitably base trade policies. Japan’s G7 effort in 2023 around emissions measurement methodologies for a net-zero steel industry was a good push; these discussions need to be brought into wider international fora. Countries could use the WTO for exchange, or at least for sharing knowledge on key developments occurring in this space. Building up wider government knowledge and building institutional bridges ultimately helps the private sector deal with a less fragmented landscape. 3. Facilitate the green economy Companies benefit from the WTO Trade Facilitation Agreement (TFA). It addresses practical challenges that occur on a daily basis when goods are moved across borders. Through initiatives such as the (GATF), companies have also been able to work with governments on implementing the TFA, homing in on specific difficulties and working to address these. WTO members should use the institution to look at ways they can facilitate green economic activity. Of course, “facilitation” can mean different things to different people, and that’s ok. For some WTO members, there might be appetite to apply the proposed Investment Facilitation for Development (IFD) Agreement to focus specifically on . The Forum is already working with investment promotion agencies in Brazil and Namibia on actions to facilitate climate FDI into their economies. Targeted investment facilitation on climate-aligned investment projects can be a helpful way to ground investor interest in climate action into specific country needs and activity. For other WTO members, facilitation could mean working to boost goods and services trade essential for low-carbon economic activity. There are some politically sensitive products in this space — like — but there are also other items where non-tariff barriers like conformity assessment procedures and different technical requirements slow down market growth and vital technology diffusions. The Trade and Environment Sustainability Structure Discussions () have made a good start in digging into these issues. For example, static converters used to convert solar energy to electricity face . These requirements may be important and do not necessarily need to be eliminated, but governments could work on regulatory cooperation to maintain the outcome and reduce trade friction. Addressing environmental challenges through the WTO WTO members can even look at how existing tools like trade facilitation can be applied to environmental challenges. Improving waste management and material recycling in some countries might require trade. Countries need to track waste movement to avoid trade being used for dumping. This is all covered by the , but as an environmental treaty, policymakers there could benefit from border expertise and new developments that make managing the process of trade easier. The GATF has worked with the International Plant Protection Committee to help countries roll out for safe plant and food trade. Could WTO members encourage the same type of collaboration with relevant fora for more material circularity? These are not necessarily topics or work that make headlines. It’s also not yet a package for a “green WTO”. Members are not there yet; they may not be for some time. But business models that are low-carbon, based on re-using and surfacing alternative materials and have nature-positive outcomes are worth encouraging. Trade has a role to play in these new economic activities, and the WTO is a good avenue for countries to collaborate through.