Despite climate related trade measures like the CBAM being one of the most controversial climate developments this year, it is still not clear whether they will formally be addressed at COP28. After a sour ending at the Bonn climate talks in June this year, countries still can’t agree whether to even discuss these types of unilateral response measures. Developed countries argue they should be addressed under the WTO, whilst African countries also want it dealt with under the global climate regime.
The UAE intends to introduce a special focus on trade at COP28, as countries are increasingly using trade to pursue their climate and growth objectives. The decision comes as Australia decides to join the G7’s Climate Club, a group that may increasingly see trade used to disadvantage countries with unambitious targets.
The South Africa government has called the EU’s CBAM “policy coercive” and a threat to a “delicate national consensus”, as it imposes climate mitigation policy onto developing countries and hinders the country’s independence to create policy in this space.
The EU’s CBAM and its other green policies came under fire during the EU’s 15th Trade Policy Review at the WTO. China said it would unfairly penalise developing countries, and Russia complained it would fundamentally challenge the structure of global goods flows and the state of competition.
Kenya intends to join a Climate Club that aims to enhance mitigation ambition through trade cooperation and possibly industrial sector targets. What does this mean for the Mitigation Work Programme?
A landmark EU deforestation law stands to significantly affect coco exports from Côte d’Ivoire and Ghana
A WTO Director-General, has reportedly sent an unapproved proposal to members on the development of a global carbon pricing framework in the context of the CBAM.
Energy companies are loving the US’s Inflation Reduction Act that seeks to shore up green technologies and supply chains through various financial incentives and the EU is taking its own measures to respond. However, the head of the IMF has cautioned that these moves may come at a cost to developing countries who have limited capacities to compete.
Early analyses indicate that the CBAM will negatively affect developing countries more than developed ones, and that the impact on African exports may be considerable in some sectors
As trade and climate become increasingly prominent on the global agenda, the newly established Coalition of Trade Ministers could play a foundational role in breaking down siloes between the international trade and climate communities, as well as bridging developed and developing country interests.