Reforms needed for clean trade

Eliminating this bias, she added, would reduce global carbon emissions by 3.6 percent while increasing global income by 0.65 percent

Discussions in the recent World Economic Forum meeting identified industrial decarbonization as the missing component in emissions reduction. Filling the gap requires international collaboration on technology transfer, financing and capacity building. | Photograph courtesy of WEF

Reforms to carbon pricing, import tariffs, and regulatory issues are needed to decarbonize supply chains in time for the 2030 goals, Ngozi Okonjo-Iweala, Director -General, World Trade Organization, said when she addressed the World Economic Forum’s Annual Meeting.

“Because countries tend to impose higher tariffs on relatively clean finished goods, but lower tariffs on often more -polluting inputs and intermediates, trade policy skews in favor of dirtier products — resulting in an implicit subsidy for CO2 production of $550 billion-$800 billion per year,” she said.

Eliminating this bias, she added, would reduce global carbon emissions by 3.6 percent while increasing global income by 0.65 percent.

There are at least 70 carbon pricing schemes worldwide, leading to uncertainty and concerns about competitiveness. The WTO is working with the World Bank, OECD and International Monetary Fund to streamline carbon pricing. “I remain convinced that a shared global carbon-pricing framework would best provide certainty for businesses and predictability for developing countries,” Okonjo-Iweala said.

Businesses are eager to push ahead with cutting-edge green technologies but remain tied up in government red tape and inertia.

“We dare to take risks — that’s extremely important,” said Nicholas Martensson, CEO of Swedish ferry operator Stena Line. At Gothenberg port, Stena and truck company Scania are working together to electrify operations. “But we don’t have enough green electricity to implement it,” Martensson said, adding: “The government has to do something.”

Hydrogen power

Antwerp port is experimenting with the world’s first hydrogen-powered tug boat, to be inaugurated in a few weeks. But getting permission to build vital shore -based green infrastructure is hampering progress. “Permits and planning, especially in the EU, are becoming a real nightmare,” said Jacques Vandermeiren, CEO of Port of Antwerp-Bruges. He said it takes eight years to get a permit to build a high-voltage electricity line. “But if we want to halve CO2 by 2030 — that’s in seven years,” he pointed out, asking: “Where’s the sense of urgency?”

Panama is leading the way as one of the very few carbon-negative countries, with 82 percent of its energy consumption coming from renewables in 2022.

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