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India Urged to Correct Misconception on Trade’s Impact on Global Emissions

Published: December 7, 2023

According to a report released by the Global Trade Research Initiative (GTRI) on Sunday, India must address the misconception that trade significantly contributes to global greenhouse gas emissions. Ahead of the United Nations climate change conference COP28 in Dubai, where trade and climate change will be discussed, the think tank called on India to highlight that trade-related activities account for only about 3 per cent of global emissions, not the often-cited 25 per cent.

The GTRI report also emphasized two other key issues for India to raise in Dubai. Firstly, it urged the World Trade Organisation (WTO) to focus on its core mandate of regulating trade rather than extending into areas managed by specialized agencies, such as the International Maritime Organization’s efforts to decarbonize shipping. Secondly, it highlighted the potential conflicts between the Paris Agreement and the Carbon Border Adjustment Mechanism (CBAM), suggesting that the CBAM’s taxing rather than stopping the import of high-emission goods may not result in desired global emission reductions.

GTRI Co-Founder Ajay Srivastava explained the discrepancies in trade-related emissions, stating that emissions from the transportation of goods contribute about 3 per cent of the global total. In contrast, emissions from production are often mistakenly attributed to the trade process, inflating its perceived environmental impact.

The report noted that the International Maritime Organization has set ambitious targets to achieve net-zero emissions by 2050, emphasizing the need for the WTO to focus on internal reform and its core regulatory functions.

Regarding the CBAM, the report highlighted concerns about its potential to undermine the Paris Agreement’s goals and suggested that taxing polluting goods may not achieve the desired global emission reductions.

Addressing these issues is crucial for India to shape the future of global trade in an environmentally sustainable and economically beneficial manner, Srivastava stated.

The climate conference, held from November 30 to December 12 at Dubai Expo City, provides a platform for discussions and actions on integrating climate-friendly measures into national trade policies worldwide.

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