The role of trade and investment to address the triple planetary crisis.

Trade policies can help address the triple planetary crisis of climate change, biodiversity loss and pollution. In this context, trade in environmental goods (e.g. wind turbines, solar panels) plays a crucial role in the dissemination of technologies that address a wide range of environmental issues. Yet various barriers to trade in environmental goods (EGs) persist, including their identification, border and behind-the-border measures in the form of tariffs and non-tariff measures, as well as methodologies to account for processes and production methods (PPMs). This session will explore the evidence on the potential benefits of trade in EGs in enabling solutions to environmental concerns, and closing the material loop for a more circular, low-carbon economy. It will discuss the issues to be tackled to realise these benefits and ensure they are widely shared. At the same time, there are debates about the design, implementation and effects of the use of trade-based measures that aim to encourage more sustainable production practices by restricting trade in unsustainably produced goods.

Companies face growing pressure from consumers, regulators, investors, and civil society to disclose and reduce emissions generated throughout their supply chains. This raises new challenges for the measurement and monitoring of carbon footprint along cross-border value chains and the trade costs stemming from the lack of harmonisation or interoperability of approaches to calculate product-level carbon intensity. This session will explore how trade policies – e.g., trade facilitation measures – and international co-operation could minimise trade costs associated with these new requirements, with a view to discussing best practices and identifying gaps in data necessary for their implementation.

An estimated USD 6.9 trillion per year worth of public and private investments are needed through 2030 to meet global infrastructure development and climate objectives simultaneously. Climate policies alone are not sufficient to mobilise the required capital. Strengthening the enabling conditions for private investment in the transition requires action across a range of policy and regulatory areas, including investment policy, tax policy, industrial policy and public governance, among others. Policy coherence, stability and predictability are prerequisites for the success of more targeted policy interventions. This session will focus on how to promote cross-border investments and capital flows in low-carbon assets and activities. What is the role of the broader investment policy framework? How can investment promotion agencies help to attract high-quality green foreign direct investments (FDIs)? Which policies accelerate and which policies hinder capital flows towards green investments? What is the role of investment guarantees? This session will also shed light on the progress achieved by companies engaged in due diligence for Responsible Business Conduct through the development of programs to identify, prevent, and mitigate adverse environmental impacts in their role as investors.

With a resurgence in the use of industrial policies driven by a range of concerns, there is growing interest in the role that well-designed industrial policies targeted at environmental outcomes could play in accelerating the net-zero transition. Industrial policies encompass a broad range of measures, including green public procurement, investing in skills for the transition and government support for the development and deployment of low-carbon technologies. The use of government support is the subject of debate. On the one hand, well-designed government support can help addressing market failures such as unpriced GHG emissions, underinvestment including from a lack of access to capital by smaller innovators, and R&D spillovers. Yet on the other hand, green subsidies could fail to deliver additionality, and undermine competitive markets, both domestically and if accompanied by protectionist policies (e.g., local content requirements) internationally. This has impact on both the innovation required for the green transition and the use of scarce public resources. In addition, evidence suggests that such subsidies tend to go the largest and not necessarily the most productive or innovative firms, and could add to existing market-distorting government support. This session will explore the link between industrial policies aimed at the green transition, trade and investment. What is the case for government subsidies for the green transition? How can any necessary government subsidies be designed to both keep the Paris Agreement objectives alive and ensure that domestic and global markets remain open and fair? What are the risks from subsidies for the global rules-based order and globally integrated markets? How to ensure that smaller and lower income countries will not be left behind in the green race?

Maritime transportation currently accounts for around 80% of the volume of international trade in goods and around 3% of global greenhouse gas emissions (GHG). Greening maritime transport will be crucial to aligning trade with the Paris Agreement objectives. The recently revised IMO strategy sets a common ambition to reach net-zero GHG emissions “by or around” 2050, and a commitment to ensure an uptake of alternative zero and near-zero GHG fuels by 2030. This session will discuss how to unlock investment into the green maritime industry and reverse the emission growth trend of the past decade. What are the most promising technologies for reaching net-zero emissions in shipping? What are the key challenges and opportunities in adopting and scaling up these technologies? How can maritime industries contribute to build long-run scalability for new energy supply chains, renewable fuel production and supply to shipping?