WORLD TRADE REPORT 2022 - World Trade Organization

WORLD TRADE

REPORT

2022

Climate change and

international trade

What is the World

Trade Report?

The World Trade Report is an

annual publication that aims to

deepen understanding about

trends in trade, trade policy issues

and the multilateral trading

system.

What is the 2022

Report about?

The 2022 World Trade Report

explores the complex interlinkages

between climate change and

international trade, revealing how

international trade and trade rules

can contribute to addressing

climate change.

Find out more

Website:

General enquiries:

enquiries@

Tel: +41 (0)22 739 51 11

Cover image:

Kamarjani, Bangladesh

Technicians travel with their equipment by rickshaw to install a solar power system at a rural house

built on Kharzanir Chor, an island on the Jamuna River. These islands come and go over a period

of around 10 to 20 years and thus connecting them to the national grid is impractical. However,

a programme of rural electrification is being rolled out using solar panels and batteries installed

at individual homes.

? Laurent Weyl / Argos / Panos Pictures.

CONTENTS

Contents

Acknowledgements and disclaimer

Abbreviations

Foreword by the WTO Director-General

Key messages

Executive summary

A. Introduction

1. The next great transformation

2. Harnessing the transformative power of trade

3. Overview of the report

B. The role of trade in adapting to climate change

1. Introduction

2. Why does climate change adaptation matter?

3. International trade and trade policy can support climate change adaptation strategies

4. International cooperation is essential to assist countries in adapting to climate change

5. Conclusion

C. The trade implications of a low-carbon economy

1. Introduction

2. Achieving a low-carbon economy is an imperative but faces challenges

3. A low-carbon economy would change trade patterns and provide new trading opportunities

4. International cooperation is essential to achieve a low-carbon economy

5. Conclusion

D. Carbon pricing and international trade

1. Introduction

2. Carbon pricing policies can be an important strategy to reduce carbon emissions

3. Uncoordinated carbon pricing policies may undermine climate action and lead to trade tensions

4. Greater international cooperation is required to advance ambitious carbon pricing policies

5. Conclusion

E. The decarbonization of international trade

1. Introduction

2. Accounting for carbon emissions originating from international trade is complex

3. International trade affects carbon emissions in multiple ways, both positive and negative

4. Reducing trade-related carbon emissions requires greater international cooperation

5. Conclusion

F. The contribution of trade in environmental goods and services

1. Introduction

2. There is scope for intensifying trade in environmental goods and services

3. Trade in environmental goods and services can contribute to climate change mitigation

4. The development and deployment of environmental goods and services require

greater international cooperation

5. Conclusion

G. Conclusion

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134

Opinion pieces

Danae Kyriakopoulou, ¡°Climate inaction: implications for international trade¡±

Gauri Singh, ¡°Green hydrogen requires an appetite for action¡±

Daniel C. Esty, ¡°Trade implications of GHG pricing¡±

Sophie Punte, ¡°Building momentum for zero-emissions freight movement¡±

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Bibliography

136

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WORLD TRADE REPORT 2022

Acknowledgements

The World Trade Report 2022 was prepared under

the general responsibility and guidance of Anabel

Gonz¨¢lez and Jean-Marie Paugam, WTO Deputy

Directors-General, and was coordinated by Jos¨¦Antonio Monteiro and Ankai Xu.

Director-General Ngozi Okonjo-Iweala, Chef de

Cabinet Bright Okogu, Yuvan Beejadhur and Trineesh

Biswas from the Office of the Director-General,

Robert Koopman, former Director of the Economic

Research and Statistics Division, and Aik Hoe Lim,

Director of the Trade and Environment Division,

provided valuable advice and guidance.

The lead authors of the report are Marc Bacchetta,

Eddy Bekkers, Cosimo Beverelli, Mateo Ferrero,

Emmanuelle Ganne, Rainer Lanz, Jos¨¦-Antonio

Monteiro, Roberta Piermartini, Daniel Ramos and

Ankai Xu. Other authors are Absar Ali, Antonia

Carzaniga, Svetlana Chobanova, Lory Iunius,

Jonathan Hepburn, Thomas Kr?uchi, Juneyoung Lee,

Kathryn Lundquist, Sajal Mathur, Hanh Nguyen, Yves

Renouf, Victor Stolzenburg, Enxhi Tresa, Ayse Nihal

Yilmaz, Khadija Zaidi and Ruosi Zhang.

Other written contributions were provided by Marc

Auboin, Christophe Degain, Peter Donelan, Kartikeya

Garg, Simon Hess, Gergana Kiskinova, Katharina

Laengle, Reto Malacrida, Jeanne Metivier, Marie

Isabelle Pellan, Philippe Pelletier, Rishab Raturi,

Melvin Spreij, Ludivine Tamiotti, Antony Taubman,

Jessyca Van Weelde and Xiaoping Wu.

The following colleagues in the WTO Secretariat

provided valuable written comments on drafts of the

report: Ratnakar Adhikari, Antonia Carzaniga, Mireille

Cossy, Violeta Gonzalez, Ulla Kask, Arne Klau,

Gabrielle Marceau, Clarisse Morgan, Juan Pablo

Moya Hoyos, Marie Isabelle Pellan, C¨¦dric Pene,

Michael Roberts, Stela Rubinova, Melvin Spreij,

Karsten Steinfatt, Sainabou Taal, Antony Taubman,

Cristian Ugarte and Xiaoping Wu. Valuable research

assistance was provided by Francesco Bellelli, Basile

Feller, Tracy Frei, Benjamin Ignoto, Socrates Kraido

Majune and Xiao Yang.

External contributions were received from Daniel

C. Esty (Yale Law School), Danae Kyriakopoulou

(London School of Economics and Political Science),

Sophie Punte (We Mean Business Coalition) and

Gauri Singh (International Renewable Energy

Agency). Background research were also received

from the following WTO Chairs, in coordination

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with Mustapha Sadni Jallab and with support from

Sandra Rossier of the Knowledge and Information

Management, Academic Outreach and WTO Chairs

Programme Division: Soledad Aguilar (Latin American

Faculty of Social Sciences), Osman Gulseven (Sultan

Qaboos University), Nada Hazem, Myriam Ramzy and

Chahir Zaki (Cairo University), Sufian Jusoh (National

University of Malaysia), Zhang Lei and Jiang Yue

(University of International Business and Economics),

Thuto Lucy Matobo (National University of Lesotho)

and Boopen Seetanah (University of Mauritius).

The following individuals from outside the WTO

Secretariat also provided useful comments on

early drafts of the report: Rolando Avendano,

Magnus Benzie, Chad Bown, Paul Brenton, Vicky

Chemutai, Brian R. Copeland, Rob Dellink, Klaus

Desmet, Yann Duval, Koffi Aseye Makafui Elitcha,

Robert J. R. Elliott, Daniel C. Esty, Marco Fugazza,

Ian Douglas Gillson, Christian Gollier, Jean-Marie

Grether, Stephane Hallegatte, Katy Harris, Dirk

Heine, Bernard Hoekman, Michael Jakob, Euijin

Jung, Stephen Karingi, Alexander Kasterine, Alexey

Kravchenko, Vesile Kulacoglu, Bruno Lanz, Jia Li,

Jeremy Lucchetti, Tatiana S. Manolova, Nicole

Mathys, Jason McCormack, Nanno Mulder, Hildegunn

Kyvik Nord?s, Ralph Ossa, Joseph Pryor, Bernard

Sinclair-Desgagn¨¦, Ronald Steenblik, Aleksandar

Stojanov, Shawn W. Tan, Mara Tayag, Robert Teh,

Shunta Yamaguchi and Irina Zodrow.

Gratitude is also due to the speakers of the World

Trade Report 2022 Webinar Series on Trade and

Climate Change for their insightful presentations:

Brian R. Copeland, Klaus Desmet, Katy Harris, Maria

Huge-Brodin, Jenny Minier, Joseph Sarkis, Misato

Sato, Joseph S. Shapiro, Bernard Sinclair-Desgagn¨¦

and Tatiana S. Manolova. Special thanks also go to

Isabelle Albrow Gerard, Carole Boureux, Viktoriya

Lazorenko and Anne Lescure for helping with the

organization of the webinars.

Jos¨¦-Antonio Monteiro and Ankai Xu of the Economic

Research and Statistics Division managed the

drafting of the Report. The text production of the

Report was managed by Diana Dent and Anne

Lescure of the Economic Research and Statistics

Division. The production of the Report was managed

by Anthony Martin and Helen Swain of the Information

and External Relations Division. William Shaw and

Helen Swain edited the report. Gratitude is also due

to the translators in the Language and Documentation

Services Division for the high quality of their work.

ACKNOWLEDGEMENTS AND DISCLAIMER

Disclaimer

The World Trade Report and its contents are the sole responsibility of the WTO Secretariat, except

for the opinion pieces written by the external contributors, which are the sole responsibility of their

respective authors. The Report does not reflect the opinions or views of members of the WTO. The

authors of the Report also wish to exonerate those who have commented upon it from responsibility for

any outstanding errors or omissions.

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