Liberalization of the global trading system will be a key factor in helping developing countries reduce their greenhouse gas emissions and adapt to climate change, said a report released by the World Bank on Wednesday.
The report, named as International Trade and Climate Change: Economic, Legal, and Institutional Perspectives, described how the trade-environment debate has so far considered little in terms of global-scale environmental problems, climate change, declining biodiversity, the depletion of ocean fisheries, and the over-exploitation of shared resources.
These "public goods" issues, which require international cooperative action, could potentially lead to trade tensions if some countries get a "free ride" on the environmental efforts of others, said the report.
Although there is potential for conflict between trade and the emerging global environmental regime to combat climate change, the report also said that some issues currently on the agenda of the WTO could potentially be harnessed to promote broader global environmental objectives.
For example, a multilateral liberalization of renewable energy sources or an agreement to remove fossil fuel subsidies would equally serve climate change objectives.
"Climate change is a global challenge requiring international collaboration," said Warren Evans, Director of Environment, World Bank. "One area where countries have successfully committed to a long-term multilateral resolution is the liberalization of international trade."
"Integration into the world economy has proven a powerful means for countries to promote economic growth, development, and poverty reduction," he added.