The World Trade Organization (WTO), the World Bank Group, and the World Economic Forum (WEF) on April 20, 2023 launched a new initiative called “Action on Climate and Trade” (ACT).
The program aims to help participating developing economies, including least-developed countries, leverage trade to meet their climate change mitigation and adaptation goals.
The pilot phase of the ACT initiative will work with participating developing economies to develop climate-related analysis tailored to their specific trade circumstances. ACT will provide these economies with insights so that they can plan for the impacts of climate change on trade, leverage opportunities for climate action and trade growth, and define areas of collaboration with trade partners.
Each participating economy’s analysis will be adapted to their specific situation and explore how trade policy can support the achievement of their National Adaptation Plans and Nationally Determined Contributions under the Paris Agreement on climate change. Egypt has expressed interest in the ACT initiative and is expected to join the pilot phase.
ACT will involve domestic stakeholders in policy analysis through public-private dialogues, giving participating economies an opportunity to explore specific ways in which trade can enhance their climate change mitigation and adaptation efforts.
The initiative will also help policymakers and stakeholders in developing economies engage in international processes such as the WTO’s Committee on Trade and Environment, and the WTO’s Trade and Environmental Sustainability Structured Discussions, where appropriate.
According to WTO Trade and Environment Division Director Aik Hoe Lim, “Trade policy offers WTO members, including developing members, a wide variety of options to enhance their climate change adaptation and mitigation strategies. This new pilot initiative by the World Bank Group, the World Economic Forum, and the WTO Secretariat will focus on supporting developing members to leverage trade to improve their climate resilience and decarbonization plans in a way that is aligned with their specific needs and local circumstances.”
Mona Haddad, Global Director for Trade, Investment, and Competitiveness of the World Bank Group, added that “by prioritizing sustainable practices and harnessing the power of international trade, developing countries can not only mitigate the impacts of climate change but also create new economic opportunities and build a better future for their citizens.”
The Head of International Trade and Investment at the World Economic Forum, Sean Doherty, emphasized the urgency of action to meet climate goals, stating that “developing economies must be empowered to identify new opportunities and shape a future net-zero global economy.”
In conclusion, the ACT initiative has the potential to support developing economies in using trade to meet their climate change mitigation and adaptation goals, while also creating new economic opportunities. By leveraging trade and sustainable practices, developing economies can contribute to building a better future for their citizens and the planet.
