As the world prepares for COP29, there is a growing divide between developed and developing nations regarding trade measures related to climate change.
A group of emerging economies, led by China, has proposed that the climate summit address what they see as protectionist policies enacted by developed countries. They argue that these measures disproportionately affect developing nations and hinder their progress in meeting climate commitments.
The BASIC group, consisting of Brazil, South Africa, India, and China, has expressed concerns that these trade measures escalate the costs of global climate action and undermine multilateral cooperation. The European Union's Carbon Border Adjustment Mechanism (CBAM), which imposes a carbon tax on imports from countries without a carbon pricing system, has been particularly controversial. BASIC nations argue that it is a form of protectionism and fails to consider the economic realities faced by developing countries.
These trade measures have broader implications for climate justice and equity, as they place an undue burden on developing nations that are already facing social and economic challenges. The BASIC group is pushing for a formal discussion on these trade measures at COP29, while the EU and the United States are expected to resist.
The financial implications of these trade measures are significant, particularly for developing countries that allocate more resources to debt servicing than social welfare. The UN Conference on Trade and Development (UNCTAD) suggests that revenues generated from the EU's CBAM could be used to support developing countries in transitioning to cleaner production methods.
The outcome of these discussions at COP29 will have far-reaching consequences for global climate cooperation and the ability of countries to collectively address climate change.