Harnessing trade policy to support our climate goals

This week, the CBI is presenting its first ever set of recommendations on trade and the environment at the World Trade Organisation (WTO) Forum in Geneva, which brings together governments, international institutions, businesses and civil society from around the globe.

Trade policy can help us reach our climate goals. At every level, from domestic policy, to bilateral and regional trade, and international agreements, the CBI wants the UK to lead from the front. And with the government hosting COP26 in 2020 and the G7 in 2021, there’s plenty of scope to shape the global agenda.

Across Whitehall, every government department has a role to play. The Treasury should be looking to increase the usage of green finance through more funding for the British Business Bank. While the Department for International Trade can leverage the UK’s emerging role at the WTO to help reduce the barriers to trade in green products and services, like solar panels and energy-efficient lighting.

These are two of the recommendations in the CBI’s report, The New Frontier: Harnessing trade policy to support our climate goals. The report looks at how the UK government can lead from the front, as well as the role international organisations can play in tackling the climate challenge.

Using the findings from research and discussion carried out with some of the CBI’s most active members in this space, the CBI has identified five keys areas of action:

• Free Trade Agreements as a vehicle to boost standards
• The potential for multilateral agreements to deliver tariff reductions
• The consumer voice as a force to drive change through domestic and international standards
• The possibility of a WTO-compatible border tax
• The role of the UK government to lead from the front

Businesses have a significant and leading role to play delivering on a low-carbon future and the CBI is working with firms to develop this agenda elsewhere. But the scale of the climate challenge is immense. It requires the full and combined attention of firms, government and civil society.

Organisations of all kinds must push forward the drive for sustainable economic development. This paper represents a call to action for governments and institutions around the world to modernise and green trade policy to boost prosperity, stimulate innovation and protect the natural environment.