Yoandry Avila Guerra*
Mitigating climate change and adapting to its consequences will require large financial investments and coordinated actions to move towards a sustainable, low-carbon economy, says the World Trade Organization (WTO) in its 2022 annual report.
International trade and its rules can and should contribute to resilience to climate change, and the WTO is known for being a leader among its more than 160 members when it comes to finding consensus on this.
Especially when you consider that the world’s major economies are located within this heterogeneous group of nations, and quite a few of them have long-standing commitments to the environment.
Climate change is an existential threat to people’s lives and is profoundly altering economic activity and trade, said WTO Director-General Ngozi Okonjo-Iweala.
Just this year, temperatures have risen from the Horn of Africa to China, Europe to America, while prolonged droughts have destroyed crops, reduced power generation and the flow of major rivers, and made it difficult to transport manufactured products and agriculture, he pointed out.
He also stressed that the climate crisis is a problem that affects the common heritage and therefore requires a collective and effective response.
Trade itself generates greenhouse gas emissions associated with production and transport, but trade flows and trade policies can also accelerate the spread of the latest technologies and best practices, spurring further innovation, he warned.
All of this, Okonjo-Iweala says, to achieve a just and resilient transition to a low-carbon economy while creating the jobs of the future.
DYSTOPIC PROJECTIONS AND HUGE ALTERNATIVES
Leaving aside dystopias presented in audiovisual fiction and science fiction productions about the impact of climate conditions on human development, the WTO report highlights one certainty: climate change is reshaping countries’ economic and commercial futures and poses a serious one threat to future growth and prosperity.
Thermal rise, sea-level rise and greater frequency of extreme weather events point to productivity losses, inadequate production levels, damage to transportation infrastructure and supply disruptions, the report said.
The document emphasizes that without significant reductions in greenhouse gas emissions, the comparative advantages currently enjoyed by many countries and sectors such as agriculture, tourism and some manufacturing activities are likely to change. There is a great reality, the planet is being divided and the effects of climate change are affecting more or less all nations, logic dictates and experts note.
Analysts recall that decades of exploitation by the world’s major economies puts less developed countries and small island nations at an even greater disadvantage in terms of climate resilience.
Experts therefore emphasize that the WTO’s demand for a coherent climate policy and financing for the climate should not remain a pipe dream.
Irish airline Ryanair, which signed an agreement to supply sustainable aviation fuel (SAF) in early December, is also among those committed to decarbonising its economic activities in this spirit.
Ryanair agreed with international energy and petrochemicals group Shell on potential access to 360,000 tonnes of SAF between 2025 and 2030, a fifth of what would be needed to meet its target of using 12.5 percent of that fuel.
Experts point out that SAF typically produces up to 70 percent less carbon than fossil fuels and offers airlines a green alternative while still flying before hybrid, electric or hydrogen aircraft options become available.
Days later, the International Air Transport Association (IATA, for its English acronym) indicated that global production of sustainable fuels for aviation will triple in 2022.
The main airline organization reported that non-fossil fuel production for the sector will reach at least 300 million liters in 2022, compared to 100 million in 2021.
IATA, an organization comprised of 300 companies representing 83 percent of global air travel, set a 2021 goal of achieving net-zero carbon emissions from aviation by 2050.
An outstanding achievement for quite a few experts, who report that this sector contributes about three percent of the world’s emissions of this gas into the atmosphere.
DIFFERENCES ON THE PATH TO SUSTAINABILITY
The active role of trade in combating climate change and having an impact on the transformation of the global economy requires policies that emerge from multilateralism and plurality, as well as consensus and real political and financial commitments.
A change that entails costs but also creates opportunities not only to prevent an environmental catastrophe, but also to reinvent the way the world generates energy, manufactures products and grows food, the WTO emphasizes in its annual report .
The consequences of not acting in this way on the climate reach us daily in the press in the form of fires, biosphere loss, flooding and their respective impacts on supply chains and economies at territorial and national levels.
However, in the search for common solutions for the transition to a green economy, there are disagreements given the call for cooperation.
Perhaps the most recent is the aftermath of the US Anti-Inflation Act, which earmarks $420 billion in investment for companies to go green, and which the European Union (EU) is facing because it considers discriminatory.
A key component of this legislative initiative are subsidies and tax breaks, particularly for electric vehicles, batteries and renewable energy projects, which favor U.S. manufacturing and which the community bloc called unfair competition.
A discrepancy that is fueling days of debates between representatives of both powers, with no solution in sight, while the world needs an accelerated global realignment of its economic and trade rules.
In this sense, the WTO insists that due to the cross-cutting nature of climate change, trade policies and those related to climate change must be mutually supportive.
This requires coordination, coherence and transparency while strengthening collaboration as a prerequisite for climate resilience, the organization warns.
*Journalist for Prensa Latina’s Economy Newsroom
rmh/tdd/yag