Trade agreements must be climate-focused, new IPCC report shows
Policy Options | 28 February 2022
Trade agreements must be climate-focused, new IPCC report shows
by Sabaa Khan
The latest Intergovernmental Panel on Climate Change (IPCC) report gives more stark evidence that ecosystems and human societies are on the brink of collapse, and that our efforts to adapt have been no better than efforts to mitigate the crisis.
The cascading impacts of an overheating climate will especially affect the most vulnerable — people already suffering extensive loss and damage. The persistence of global inequalities in socioeconomic development will lead to millions more people facing energy, food and water insecurity.
The recent report, Impacts, Adaptation and Vulnerability, calls for transformational change in the way we produce and consume, and points to the dire need for governments to invest more in adaptation. But domestic and international climate policy alone can’t solve this problem. Governments need to acknowledge the profound impact of their trade and investment policies on climate change, and reverse longstanding patterns of deep incoherence between our climate policy objectives and the emissions-intensive trajectories of the global economy.
This is the second of three working group reports, which along with three special reports and a synthesis report make up the IPCC’s Sixth Assessment (AR6). The first, released in August 2021, assessed the physical science, showing climate change is widespread, rapid and intensifying. The third, expected in March, will focus on climate change mitigation.
The latest report signals that behavioural changes are required throughout society — from individuals and communities, to institutions and governments. But it’s clear that, above all, governments must assume with far greater urgency their shared responsibility to set the parameters of the global economy to enable everyone to adopt more climate-sensitive lifestyles and ensure global inequalities don’t worsen.
As one of the largest per capita greenhouse gas emitters and exporters of coal, oil and gas, Canada has a major role to play. The report should motivate government to enhance the international co-operative dimensions of its National Adaptation Strategy to assume its fair contribution to international climate finance and, most importantly, to mobilize its trade and investment policies as real vectors for climate action.
Although multilateral and bilateral agreements for sustainable trade and investment are key to changing global industrial production and consumption patterns, trade wasn’t a major topic at the 2021 COP26 climate summit in Glasgow. But commitments made by Canada and others, including those aimed at halting deforestation and ending international fossil fuel project financing, have clear links to trade and investment policy.
Just a few days after COP26, Canada and the member states of the Association of Southeast Asian Nations (ASEAN) announced negotiations for a comprehensive free trade agreement. While these could be an opportunity to create trade rules and practices aligned with international and domestic climate policy objectives, climate change wasn’t mentioned in the international trade minister’s notice of intent to enter negotiations. The minister’s mandate letter incorporates expectations linked to advancing Canada’s climate change commitments, but it doesn’t include any explicit references to climate change regarding free trade opportunities.
A joint economic analysis by the trading partners projected that a trade deal with ASEAN could increase Canada’s GDP by US$2.54 billion, but it offers little insight into how the projected growth relates to and may negatively affect the climate, nature and pollution crises.
In light of the recent IPCC reports, Canada’s so-called progressive approach to free trade negotiations is outdated and risks exacerbating the climate crisis. Canada should follow the transformative lead of New Zealand, Costa Rica, Fiji, Iceland, Norway and Switzerland: In 2019, they started negotiating an Agreement on Climate Change, Trade and Sustainability, intended to bring together climate, trade and sustainable development agendas.
The ACCTS negotiations cover removal of barriers to environmental goods, binding commitments on environmental services, efforts to eliminate fossil fuel subsidies and guidelines for high-integrity eco-labels. Canada should draw on this innovative approach and reorient its trade policy agenda to centralize the economic, social and environmental threat of the climate crisis. To ensure that greening trade policy doesn’t impact poor countries, it must also incorporate rules to promote transfer of sustainable technologies and increase access to intellectual property.
In the face of an existential threat, there’s no room for 20th-century approaches to international trade. As a globally interconnected society, transnational partnerships and global solidarity are key. We need a vastly different kind of economic globalization, an overhaul of the fundamental principles that underlie our commercial relations, including abandoning investor-state dispute settlement processes.
International trade was promoted after the Second World War under the belief that greater economic interdependence would reduce protectionism and war, and foster peace and prosperity. Sadly, the way we’ve liberalized trade has increased health inequities in the globalized workforce and worsened the climate, nature and pollution crises. Exploitation-based growth has fuelled global conflict and inequalities. We must act now to avoid history repeating itself.
