Policy expert Faten Aggad, has proposed the creation of a trade decarbonisation fund to minimise the impacts of non-tariff trade measures on the continent, such as the EU and UK’s CBAM and the EU’s Deforestation Regulations. These measures risk worsening Africa’s economic vulnerabilities if not acted upon, with the continent already experiencing the economic strain of emerging climate-linked trade measures. A trade decarbonisation fund could enable Africa to be competitive, promoting fairness, stronger supply chains and help Africa navigate these measures and frameworks in the global trading system. Writing for African Business, Aggad argues that the fund would be about global fairness, resilience in supply chains and strengthening African ability in the emerging global low-carbon trading systems. An African trade decarbonisation fund would provide grant financing to support soft infrastructure building, like systems for emission counting, and concessional loans to support hard infrastructure. It could also facilitate partnerships for the diffusion of new technologies to support, for example, more energy-efficient industrial processes. Its revenue could come from revenue generated by the CBAM, as well as revenue generated by other similar measures.
