Fighting New Trade Protectionism Tied To Climate Change

NEW DELHI: Globally, a number of nations are observing a consistent decline in greenhouse gas emissions. Particularly for industrialised economies, CO2 emissions per person have decreased by 1.8 Gt since 2000. However, there is mounting proof that the shifting of emission-intensive industries to emerging economies is a contributing factor in the advanced economies' reduction in emissions. While production-based emissions have stagnated or decreased in a number of wealthy nations, consumption-based emissions, which are adjusted for trade, are continuing to rise.

If developed economies with cleaner technologies and stricter environmental regulations move their polluting industries to developing nations, there will undoubtedly be little effect on global emissions; instead, there will merely be a change in the source of emissions, not a reduction. When these developed economies start punishing developing nations for their offshored polluting activities, the issue only gets worse.

Environment-related alerts and actions taken by World Trade Organization (WTO) members have steadily increased. Environmental concerns accounted for 16.7% of all notifications submitted by WTO members in 2020, and over the previous ten years, over one-third of all environmental trade measures had a climate change component. Nearly half of the climate-related measures that were notified between 2011 and 2020 came from the United States (US), the European Union, Canada, and Japan combined.

With some advanced economies launching initiatives to encourage the use of less polluting technology in production processes outside of their borders, the measures are anticipated to acquire greater popularity. For instance, the European Commission has suggested a Carbon Border Adjustment Mechanism, which would penalise imports of specific goods like metal products, fertilisers, and cement. The US is also thinking about imposing a polluter fee on some imports with high carbon emissions. The wealthy economies penalise imports from the developing nations, refusing to compensate them for the higher health and social costs brought on by the offshore polluting sectors. Given that these nations control a significant portion of world trade, the levies would have a significant effect.

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