Making trade greener

FOR DECADES, the dominant view among policymakers was that trade and environmental policy should be kept out of each other’s way. Limited measures to help the environment were allowed under WTO rules, but only so long as they restricted trade no more than was deemed absolutely necessary. Environmental provisions crept into trade deals, but were usually framed as a way to stop partners from gaining an unfair competitive advantage by exploiting natural resources. Trade negotiators tried to slash tariffs on greener goods, including those that measure or reduce pollution, and to agree rules to curb damaging subsidies. But this broadly supported multilateralism while eliminating distortions that they mostly wanted to get rid of anyway.

The most obvious change in recent years has been in the priority that politicians (and voters) now place on environmental goals. In 2008 41% of American adults told the Pew Research Centre, a think-tank and pollster, that protecting the environment should be a top priority for the president and Congress, but that number rose to 64% in 2020. A survey of Europeans in 2021 found nearly one in five saying that climate change was the world’s most serious problem, slightly ahead of poverty, hunger, lack of drinking water and infectious diseases. Ambition has been codified in the Paris agreement on climate change of 2015 and in the UN’s sustainable development goals.