The Trade and Climate Change Nexus: The Urgency and Opportunities for Developing Countries
World Bank Group
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Abstract: Climate change is increasingly at the forefront of domestic and international policy priorities,and solutions are urgently needed. Trade plays an important role in the emission of greenhouse gases that exacerbate climate change through its effects on the location and scale of production,consumption decisions,emissions from the international transporting of goods and services,and the transfer of technologies that may lead to lower emissions in production. Most recent estimates show that around a quarter of all global emissions are linked to international trade flows. While attention is currently focused on reducing emissions,it is increasingly recognized that the climate is already changing and that solutions to adapt to rising temperatures and more extreme weather events are urgently needed. According to the World Meteorological Organization (WMO),the summer of 2021 has seen intense and unprecedented heat waves,especially in the Northern Hemisphere. Additionally,the WMO reports that from 1970 to 2019,weather,climate and water hazards accounted for 50 percent of all disasters,45 percent of all reported deaths and 74 percent of all reported economic losses,with 91 percent of the deaths occurring in developing countries (WMO 2021b). Moreover,several climate economists have made projections and stressed the urgency of acting now,insisting that policy makers act in the coming decades,as these years represent a window of opportunity to develop smart and forward-looking adaptation policies.