A slew of urgent reforms in carbon pricing, import tariffs and regulatory issues are needed to decarbonise supply chains in time to achieve the 2030 goals to halve CO2 emissions, WTO Director-General Ngozi Okonjo-Iweala said here.
“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 favour of dirtier products – resulting in an implicit subsidy for CO2 production of USD 550-800 billion per year,” she said on Thursday night during the World Economic Forum Annual Meeting 2023.
Eliminating this bias, she added, would reduce global carbon emissions while increasing global income.
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There are at least 70 carbon pricing schemes worldwide, leading to uncertainty and concerns on competitiveness, and the World Trade Organization is working with World Bank, Organisation for Economic Co-operation and Development and International Monetary Fund to streamline carbon pricing, she noted.
“I remain convinced that a shared global carbon-pricing framework would best provide certainty for businesses and predictability for developing countries,” Okonjo-Iweala added.
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