The role of trade agreements in mitigating climate change and enhancing sustainable energy

Sustainable energy is a burning issue in a world where 1.4 billion people still have no access to electricity. A solution for sustainable energy is better governance of energy trade. Energy security, or access to energy at an... [ view full abstract ]

Sustainable energy is a burning issue in a world where 1.4 billion people still have no access to electricity. A solution for sustainable energy is better governance of energy trade. Energy security, or access to energy at an affordable price, is one of the main problems humanity faces. Without access to energy, people and countries cannot develop their potential. Today’s environmental challenges are driving a shift from fossil fuels towards clean and renewable energy, i.e., energy from sustainable sources, as opposed to conventional sources such as oil, natural gas, or coal. We argue that trade agreements can help mitigate climate change and enhance sustainable energy. In the past, they have been a very powerful instrument for change. The aim is to show that trade agreements have tremendous potential to help mitigate climate change, which is currently under-explored. The find the following synergistic links between the international trading system and the climate change regime: minimizing conflicts between the trade and climate regimes; revisiting the concept of ‘like’ products; climate action via the formation of climate clubs; n agreed framework for a global Emissions Trading System and border measures; shift subsidies from fossil fuels to renewable energy; and fostering sectoral approaches such as aviation and shipping. We conclude that there is still much to do about how the trading system can be supportive of clean energy and climate action. We further conclude that the role of international trade (agreements) in renewable energy may be enhanced in the future. For instance, wind and sunshine in northern Europe is not the same as in southern Morocco. The price of northern European renewable energy will therefore be higher. International trade will therefore play a major role to reduce prices. For that to happen, free and fair solar trade in the global value chain of trade in goods and services is a must. The elimination of trade barriers damaging the global value chain is necessary, whether it is local content requirements or fossil fuel subsidies, as is the promotion of green growth for a sustainable future.