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BRIEF December 10, 2020

Trade and Climate Change

Large container ship

Photo: Joseph Rebello


Overview

Fighting climate change is vital to equitable global development and poverty reduction—and international trade can have an important role to play in this endeavor. Trade can help countries adapt to higher average temperatures and more extreme weather events by offering consumers lower-emissions goods and services and facilitating the use of climate-friendly technology. But climate change may also negatively affect trade as extreme weather events raise the cost of trade, by destroying or degrading transport infrastructure and reducing agricultural production.

The World Bank is engaged with external partners and academic experts to deepen our understanding of the complex dynamics between trade and climate change, to help us identify the critical solutions required to inform our work with client governments. These are some initiatives we are working on:

  1. Research and analysis: Trade and climate change discussions require a strong analytical base. Among the topics of World Bank research are emissions related to trade, concerns over carbon leakage, potential climate change mitigation through trade, and trade as a mechanism for climate change adaptation.
  2. A trade and climate change database: Creation of a one-stop-shop interactive database for all trade-and-climate relevant information.
  3. Development of country analysis framework: This tool will provide guidance in analyzing the trade and climate interactions in developing countries.

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