WIREDGOV

EXPERT COMMENT

Although not on the formal agenda at the upcoming COP26, rising climate and trade tensions cannot be ignored. A coalition approach could be the answer.

Tackling the intersection of trade and climate policies is central to achieving the goals of the Paris Agreement, but ensuring that growing trade tensions do not thwart progress urgently requires dialogue and international cooperation at the highest political level.

Trade issues are directly relevant to climate action in many ways. Achieving the Paris climate goals requires a significant change in the organization of global value chains and in the composition and geography of trade flows.

As no country’s economy operates in isolation, domestic efforts to decarbonize and implement climate policies to achieve net zero commitments also inevitably affect trade. In the absence of a global carbon pricing system, for instance, domestic carbon pricing policies raise competitiveness and carbon leakage concerns, prompting calls for border carbon adjustments.

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