The AfCFTA has become the focal point of discussions about a wide range of matters, including how to boost intra-African trade and economic integration, how the State Parties can industrialise and develop value chains, how to accommodate the needs of women traders, and how to deal with technological and digital developments. It has been argued that the AfCFTA also needs a protocol on the environment, and more specifically on climate change. Such a protocol will have to be negotiated, adopted, and ratified by the 55 Members of the African Union (AU). This will be a daunting task, and the new protocol will overlap with existing multilateral and regional climate-related arrangements. Is an additional Protocol on Climate Change under the AfCFTA arrangement therefore needed?

The African Continental Free Trade Area (AfCFTA) Agreement envisages a comprehensive and modern trade arrangement that promises to “promote and attain sustainable and inclusive socio-economic development, gender equality and structural transformation of the State Parties”. The attainment of sustainable development (which comprises social, economic and environmental dimensions), necessitates the pursuit of environmental sustainability. Despite this, environmental sustainability and climate change concerns have not featured prominently in the development of the AfCFTA. This Trade Report presents a case for why this should change by exploring the current extent of environmental references and considerations in the AfCFTA, outlining the relationship between trade and the environment in the African context, assessing the environment-trade commitments State Parties have made elsewhere, and discussing the significance of the AfCFTA as a framework for Africa’s (potentially green) industrialisation. A number of options for putting climate change on the AfCFTA agenda will be discussed, namely the addition of a Protocol on Climate Change/the Environment/Sustainable Development (hereafter referred to as a Protocol on Climate), a new institutional arrangement, and a stronger environmental focus in the AfCFTA’s national implementation process.

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As the threat of dangerous levels of global warming becomes more severe, climate change is climbing to the top of the list of domestic and international policy priorities. To tackle the issue, policymakers are utilising every available strategy in their arsenal, including trade and industrial policy measures. Simultaneously, environmental policies and initiatives that do not directly employ trade-related measures are having significant impacts on production processes, consumer demand, and trade flows.

National approaches to regulating carbon emissions are diverging significantly, shaped by complex domestic factors. The ideal solution of globally coordinated policies that combine carbon pricing, non-discriminatory subsidies for green technologies, and transfers from high-income to lower-income countries, is looking increasingly unlikely to materialise. Instead, a patchwork of national policies is cropping up that creates a range of challenges and opportunities for foreign producers who must comply with the domestic regulations in export markets. The challenges loom large for firms in developing countries that may lack the data, capacities, and technologies to measure and verify the environmental impacts of their products. As a result of these interventions becoming more widespread, ambitious, and varied, the trade-environment space is a rapidly evolving one that demands close attention. This trade brief discusses some notable recent developments which are shaping the trade-climate landscape.

Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac.

The relationship between food security, trade and the environment is a complex but increasingly important one. The impacts of climate change have undermined progress in food security and threaten to continue setting Africa back in achieving the UN Sustainable Development Goal 2 of Zero Hunger by 2030. Trade plays a critical role in food security in the face of climate change, ensuring that food can move from areas with food surpluses to those facing food shortages. As climate change impacts regions and their food production differently, this balancing-out function will become increasingly important. 

Along with the acknowledgement of the need to safeguard global food security in the context of climate change, transformation is needed within the WTO to overcome long-standing inequities in the agricultural trade system and bridge the differences between developed and developing members. This will be necessary to strengthen the resilience of vulnerable countries’ agri-food systems to shocks. 

This Trade Report discusses some key asymmetries in the WTO Agreement on Agriculture negotiations that need to be addressed, including public stockholding programmes, AMS allowances, and ineffective special and differential treatment provisions. It also discusses some adaptation measures that address the continent’s key climate-related challenges in the agricultural sector, outlining the potential of deeper regional integration to accelerate the transition to food system resilience.

See the related Infographic: Climate, trade and food security

Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac.

The European Parliament has been engaged in a lengthy legislative process for reviewing the European Union Emissions Trading System (ETS). The revision forms a key part of the Commission’s Fit for 55 climate legislation package, which aims to bring EU legislation in line with the 2030 goal of reducing net greenhouse gas emissions by at least 55%. On June 22nd 2022, the next step of the process was complete, as the European Parliament adopted positions on the ETS reforms and the design of a Carbon Border Adjustment Mechanism. The texts adopted by the EU Parliament, which contained several amendments to the initial EU Commission proposals, will determine Parliament’s position on negotiations with EU member countries. While the outcome is unknown, Parliament’s position sheds light on what shape the final EU ETS revisions and CBAM may take.

Both measures are expected to have significant spill-over effects on the EU’s trade partners. Many low and middle-income African countries are particularly vulnerable to these effects. Third countries should follow the legislative process closely and develop their understanding of existing risks to ensure they are prepared to adapt where necessary.

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The climate change crisis might have taken a backseat during the COVID-19 pandemic, but it has certainly again come to the fore with the release of the latest Intergovernmental Panel on Climate Change Sixth Assessment Report (IPCC 2021). This is a truly sobering report which puts into perspective the consequences of rapid and rampant climate change and the role humanity has played in it.

This trade brief will provide a brief overview of currently available greenhouse gas emissions (GHG) data with a focus on its sectoral contribution. It will also provide a brief synopsis of promising climate-related developments in the fight against climate change. Finally, it will conclude with a brief discussion of the latest Intergovernmental Panel on Climate Change (IPCC) report.

Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the author and do not purport to reflect the views of tralac.

The 74th session of the United Nations (UN) General Assembly (UNGA 74) opened on 17 September 2019, with the General Debate taking place from 24 to 30 September 2019. This was a session of particular significance for the addressing of climate change and stimulating targeted action on the sustainable development goals (SDGs). There were numerous agenda points of UNGA 74 that had a specific focus on sustainable development, on Africa, and on sustainable trade. A particular talking point for Africa was the addressing of illicit financial flows which collectively siphon off billions of dollars out of Africa every year. It is essential that a global partnership is developed to stem this flow and to allow African countries to take the lead in generating the necessary funds for SDG realisation and sustainable support.

Although progress has been made towards achieving the SDGs and selected targets by 2030, it is clear that a redoubling of efforts and much greater global cooperation is needed to ensure their realisation by 2030. There are multiple challenges that countries and regions face, and a renewed spirit of multilateralism and global partnership is needed to pursue targeted interventions, to secure finance, and to ensure sustainable development. UNGA 74 gave countries and parties the opportunity to take stock of the SDGs and to identify interventions and critical entry points that have the potential to target and accelerate progress in achieving multiple SDGs. Developing countries are often stymied by lack of financing, knowledge access, and capacity to address the SDGs. It is only through global cooperation that these goals will be timeously and properly realised.

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The most severe impacts of climate change are often felt by the least developed and low-income countries. These countries are scarcely able to afford the challenges of mitigating against and adapting to climate change given their fewer financial and institutional resources, but it is developed nations that are major drivers of climate change given their historical industrial outputs, and given their financial resources are better able to pursue mitigation and adaptation actions.

This paper provides an overview of the various macroeconomic risks associated with climate change. It will discuss fiscal considerations and consequences of climate change as well as discuss some appropriate policy measures. The paper will also address issues related to minimizing competitiveness effects when policy is designed to address climate change, particularly when domestic production prices rise in relation to international prices as a result of environmental taxes. Finally, the paper offers some ideas on how governments themselves can manage their exposure to climate change risks.

Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the author and do not purport to reflect the views of tralac.

The latest report released by the UN Intergovernmental Panel on Climate Change (IPCC) approved on 6 October 2018 is a stark reminder of the dire consequences and impact of global warming, even under a more ambitious target of a 1.5°C limit. This is particularly concerning since parties to the Paris Agreement agreed to limit global warming to 2°C. The report shows that limiting it to the more ambitious target of 1.5°C would still have dire consequences.

The Report provides an outline of the impacts of global warming of 1.5°C above pre-industrial levels and related global greenhouse gas (GHG) emission pathways in the context of strengthening the global response to the threat of climate change, sustainable development and efforts to eradicate poverty. The report contains findings based on available scientific, technical and socioeconomic literature. These findings, as well as comparisons between warming of 2°C, are discussed in this paper. The global impact of the two scenarios of 1.5°C and 2°C warming is outlined as well as their impact on Africa.

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The 24th Conference of the Parties to the United Nations Framework on Climate Change (COP24) took place in Katowice, Poland from 2-14 December 2018. COP24, which marked the third anniversary of the Paris Agreement, was hosted under the specter of dire warnings presented by the United Nations’ Intergovernmental Panel on Climate Change (IPCC) Special Report on 1.5°C of Global Warming issued in October 2018.

COP24 had three main objectives. The first entailed the completion of the rulebook for the full implementation of the Paris Agreement. The second was to encourage nations to increase their carbon reduction pledges by 2020. Finally, COP24 sought to increase the climate-finance commitments for poor nations which are already suffering the impacts of climate change.

Given the seriousness of climate change/global warming and the fact that carbon emissions have risen for the first time in 3 years, COP24 called for a renewed sense of urgency for governments to pursue both climate change mitigation and adaptation initiatives.

Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the author and do not purport to reflect the views of tralac.