Climate Negotiations and Action Trade Policy at Work

Greening Aid for Trade: Future priorities and pathways for a just transition to sustainable trade

This session explored how to effectively mainstream environmental considerations across Aid for Trade programmes, towards supporting sustainable trade strategies in line with the development priorities of developing countries. Discussions also considered how to ensure that monitoring systems accurately capture environmental information, as well as ways to link Aid for Trade with wider efforts to finance the shift to a green global economy and a just transition.

Discussions recalled that, as governments and stakeholders work to promote the massive economic transformation that sustainability requires, trade and trade policy have a critical role to play. To support developing countries in the transition to more sustainable trade, Aid for Trade has a key role to play in ensuring that trade serves all three dimensions of sustainable development – economic, social and environmental.

The importance of trade-related capacity building and technical assistance on matters of sustainability, including its environmental dimensions, was highlighted. In fact, the issue is a recurring theme of discussions in both the WTO’s Committee on Trade and Environment and its Committee on Trade and Development. It was stressed that, as WTO Members review progress to date and prepare the Aid for Trade work program from 2022 onward, ensuring that future work strengthens attention to environmental issues as a key pillar of work on sustainable trade will be critical to advancing a green, resilient and inclusive global economy.

Considering ways to move forward on mainstreaming environmental considerations into Aid for Trade in a manner that is just and meaningful for developing countries, discussions identified three possibles risks: (i) lack of buy-in by aid recipient countries, to be mitigated by involving them and building their knowledge while creating a clear process for reviewing and adapting aid delivery; (ii) to avoid creating additional burden on developing countries, additional financial resources should be made available rather then recycling existing aid; (iii) should access to green Aid for trade require meeting new criteria, adequate capacity building should be provided towards meeting them.

Reflecting on how Aid for Trade projects can help support efforts in developing countries to harness the potential of circularity, as well as how to ensure environmental information is adequately captured in monitoring systems, experiences from UK-funded initiatives were shared. Examples showcased included the Kenya Green Energy Challenge Fund, as well as collaboration with UNCTAD programmes on plastics pollution. It was also reported that the United Kingdom is committed to align its ODA with the goals of the Paris Agreement.

Exploring possible pathways for a just transition to sustainable trade, lessons from a recent policy brief addressing this question were shared. The brief argued that Aid for Trade should be viewed as a key part of the policy toolkit for trade policies that advance sustainable development and respond to urgent environmental crises. Greening Aid for Trade requires a nuanced approach that pursues simultaneous action through six complementary pathways: (i) mainstream environmental goals in Aid for Trade planning and projects; (ii) secure new and additional resources for environment-related Aid for Trade activities rather than substitute existing support; (iii) foster greater coherence between Aid for Trade and wider global policy agendas; (iv) ensure that Aid for Trade monitoring systems accurately capture and report information about the environmental purpose and impacts of funded projects; (v) integrate trade considerations into existing climate and environment funding initiatives; and (vi) explore options for strengthening South–South cooperation on sustainable trade.

Finally, panelists reflected on the role international organizations like UNEP could play in working with the WTO and Aid for Trade secretariat in achieving a just transition to sustainable trade. Some opportunities and advances by the international community were noted, such as the recent decision of the United Nations Environment Assembly to start work on an international, legally binding treaty to tackle global plastic waste.

On the panel were Rashid Kaukab, Executive Director, CUTS International Geneva; Alice Tipping, Lead, Sustainable Trade and Fisheries Subsidies , IISD; Chad Blackman, Ambassador and Permanent Representative of Barbados to the United Nations and Other International Organizations in Geneva; Carolyn Deere Birbeck, Director, Forum on Trade, Environment and the SDGs (TESS); Simon J Manley, Ambassador and Permanent Representative, Mission to the UN and WTO, United Kingdom; Mujtaba Piracha, Ambassador and Permanent Representative Permanent Mission to the WTO, Pakistan; Steven Stone, Deputy Director, Economy Division UN Environment Programme (UNEP).

Reporting by Julien Grollier