Climate change is already here. It has dreadful impacts on people’s daily life, and the public is growing worried about it. According to our latest survey on climate literacy, 75 per cent of respondents across eight countries are (very) anxious about climate change.
Climate change is also impacting global trade. The drought at the Panama Canal has halved capacity at a key waterway. Global trade is only getting a taste of its own medicine as around one third of global greenhouse-gas emissions stem from trade itself.
To make trade greener, we must pull on five key levers: first, leading economies should re-engage in promoting and facilitating green trade to help increase the supply and lower the price of green technologies. Second, all stakeholders need to agree on what counts as a green product. Third, governments should give clear guidelines and standards for sustainable production and consumption through appropriate labelling and public price subsidies. Fourth, customs duties for green products need to be reduced further or even removed to make them more affordable for consumers. Finally, governments need to redirect excess savings towards financing companies that produce a green product, while implementing additional tax breaks for those businesses.
Greening trade is no longer an option and we must use all available technologies and policy options to do so. Over the last couple of decades global trade has been a great driver of development and poverty reduction; it is our duty to support firms and push policy makers towards now making it more sustainable.
Aylin Somersan Coqui, CEO of Allianz Trade