unctad.org | Trade and Climate Change: Challenges and Opportunities for Small Developing Countries, LDCs, and Countries in Sub-Saharan Africa
Trade and Climate Change: Challenges and Opportunities for Small Developing Countries, LDCs, and Countries in Sub-Saharan Africa
10 December 2017
Buenos Aires, Argentina

Key Issues

Background
Climate change is one of the greatest challenges facing the international community. The 2030 Agenda for Sustainable Development, specifically SDG 13, calls for urgent action to combat climate change and its impacts. The UN climate change agreement, which was signed in Paris in December 2015 and entered into force about a year later, is already a major milestone in this global effort to combat climate change. Reducing greenhouse gas emissions and promoting greener, climate-resilient development is indispensable in attaining many of the SDG targets. Commonwealth members, especially small states, LDCs and SSA countries, are highly vulnerable to the physical impacts of climate change. Recent extreme weather events – notably Hurricane Irma and Hurricane Maria – have wrought devastation in the Caribbean.

The ACP Group Declaration, issued on 19 October 2017 in Brussels, mentions that “In the context of the 2017 hurricanes that had decimated some ACP Island States, [we] noted the need to look at how the issue of perpetually vulnerable states whose situation has been made worse by climate change, could be given special attention at the WTO”. Indeed, most small states, LDCs and SSA countries have the least capacity to manage the risks and to adapt to the environmental, economic and social fallouts they are already experiencing. Furthermore, there is always the risk that international mitigation policies and other measures to combat climate change could impair these countries’ trade competitiveness.

Overall, the physical and regulatory impacts of climate change can affect their sustainable development prospects through trade. However, there may also be enhanced trade and investment opportunities in economic sectors associated with the transition to a lower carbon or “green economy”, and these should be pursued. Many Commonwealth countries have high export concentrations in climate-sensitive sectors, including agriculture, mining, fisheries, forestry and tourism. In Barbados, for instance, rising sea levels, increased hurricane activity and beach erosion are projected to significantly impact on the tourism sector, especially tourist arrivals, infrastructure and related facilities.

For others like Namibia, Tonga or Tuvalu, fisheries are important sectors of the economy and climate change may impact on fish stocks and sustainability. In Fiji, climate change could cause a drastic reduction in the production of sugarcane, which is a key export after fish products and bottled water. These countries will need to diversify their economies to build resilience for the future. But climate change also presents trade opportunities for these countries. The global green transformation offers Commonwealth countries opportunities to diversify into new products and services and access technologies for cleaner, more efficient production. New export opportunities in green markets may be important drivers for those economies that manage to secure some market share.

Developing and acquiring environmentally-friendly technologies, while sometimes expensive, will be vital for all countries in maintaining efficiency and competitive edge. The liberalisation and trade in environmentally-friendly goods and services, as originally envisaged by the WTO’s Doha Round and now being pursued in some plurilateral initiatives and RTA negotiations, could also contribute to reducing greenhouse gas emissions. But one should be mindful that small states and LDCs are already facing challenges in participating effectively within the multilateral trading system where some of these issues are discussed. These economies are often highly reliant on natural resources and therefore their trade livelihoods, processes and sectors will be vulnerable to the effects of climate change and environmental degradation.

Main objective
This Commonwealth-UNCTAD side event on trade and climate change represents an effort by our two organisations to inform member countries and stakeholders on key issues of trade, climate change and sustainable development, with a view to contribute to current international discourse and help member countries consider and develop policy responses and mechanisms to mitigate the threats and explore potential opportunities.

Language(s):English
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