Can the international trade system be a catalyst for reforming fossil fuel subsidies (FFSs) to help relieve the burden on the public purse, reduce local and global air pollution, improve energy security and tackle climate change?
This was the theme of a recent workshop set at the World Trade Organization (WTO) in Geneva and organised by Climate Strategies, the Stockholm Environment Institute and the International Institute for Sustainable Development. The event forms part of a broader conversation on how the international trading system can be made compatible with the UN Sustainable Development Goals (SDGs) and the goals of the Paris Agreement on climate change.
“We can’t introduce additional environmental policies. Won’t they negatively impact our economic growth?”
This is a common concern for many policymakers around the world. Available evidence is not yet conclusive, indicating both gains for competitiveness in some cases and competitiveness decline in others. Perhaps more importantly, the empirical analysis on this topic as a whole is surprisingly sparse, particularly for developing countries.
A lot has been said about the surprise results coming in from recent elections and referendums across the globe, and many point to the same thing: growing dissatisfaction and disenchantment with the status quo. Despite rapid progress – or at least the appearance of progress – since the close of World War II, the basic tenets of our prosperity including free trade, free markets and globalization writ large are being called into question.
And perhaps justly so. In spite of the large uplift of population from absolute poverty levels – principally in China but across the emerging economies – social inequality between and within countries has rarely been as high, with the top 8 income earners in the world now grossing the equivalent of the bottom 3.6 billion of the world population.