An introductory learning companion, launched by the United Nations Environment Programme, provides learners of all types with up-to-date resources to better understand the connections between trade, environment and development.
Trade, via global value chains, connects countries through complex processes of production and consumption to form a highly integrated global economy. The value of exported goods alone accounts for almost 25% of total global output. However, the rapid increase in globalized production in the past decades has created an immense burden on the environment, and increased socio-economic inequalities.
Climate change, loss of biodiversity and the depletion of water reserves are some symptoms of environmental degradation resulting from such anthropogenic activities as international trade, which also pose acute societal and economic risks. It is estimated that international trade is associated with 30% of threats to species globally and drives 29-39% of deforestation-related emissions.
These environmental impacts are felt disproportionally by lower-income countries; many are tropical and are often the worst affected by climate change in terms of crop productivity, among other factors. This direct effect is compounded by agriculture’s large share of the economic activity in these countries. Similarly, in terms of impacts of resource use, in 2017, each person in the high-income group of countries was dependent on the mobilization of an average of 9.8 tons of material resources elsewhere in the world.
Trade and trade policies that are in alignment with related social and environmental policies can be used to not only alleviate the negative socio-economic and environmental impacts, but also to enhance a country’s welfare, and promote broader sustainable development policy objectives.
For example, certification schemes can promote the greening of global value chains by facilitating sustainable trade and contributing to the quality of traded goods. The proliferation of sustainability certification and labelling schemes is a visible sign of a rapidly expanding global market for sustainable products. The institutionalization of such schemes could contribute to meeting goals for climate adaptation and mitigation by making supply chains deforestation-free, and livelihoods more sustainable.
Moreover, trade in environmentally sound technologies (ESTs) offer triple-win opportunities by promoting economic development, job creation and innovation while simultaneously fostering economic and climate resilience. Such trade enables countries to improve their environmental performance, including climate mitigation through access to low-carbon technologies. Similarly, trade can also support adaptation to climate change in poorer countries by increasing their adaptive capacity through access to finance and technology relevant to various sectors.
Trade policies must promote not just economic growth, but also inclusive, sustainable and equitable development outcomes. To do so, it is necessary to understand the dynamics of global value chains and the far-reaching impacts of trade policies on human rights and the environment.
A new Introductory Learning Companion, launched by the United Nations Environment Programme (UNEP) under the UKRI GCRF TRADE Hub project, is a great resource to better understand the connections between trade, environment and development.
The companion has been developed with the aim of providing an up-to-date, evidence-based, interdisciplinary resource for all types of learners, including those with little or no prior knowledge on economic and trade policy, or the interactions between trade and nature. It can also serve as a useful resource and reference manual for lecturers and trainers in the professional or higher education contexts.
The Learning Companion helps readers:
- Understand the role of trade in the global economy, and the major trends that have shaped the evolution of globalization
- Describe the mechanisms via which trade can promote or retard economic growth
- Appreciate the complex relationship between trade and inequality – between countries and within countries
- Understand the various mechanisms in which trade can affect nature, both positively and negatively
- Appreciate trade's increasingly important role as a tool of sustainable development in general, and environmental sustainability more specifically
The nexus of trade, development and nature are multifaceted. While trade can be – and has been – detrimental to the environment, it can also be an effective and significant tool for realizing the 17 UN Sustainable Development Goals. Proactive trade policy approaches can complement environmental policies and campaigns to tackle growing environmental challenges, as well as foster economic and social prosperity.
This guide will give a succinct picture of these complex inter-relationships to better understand the direction trade policies must take to reach timely and effective solutions.
