COP27: UNCTAD-WTO high-level forum on global investment and trade for climate transformation
09 November 2022
Your Excellency, Ngozi Okonjo-Iweala, Director-General of the WTO, Your Excellencies,
Distinguished guests, Ladies and Gentlemen,
It is my pleasure to welcome you to this roundtable organized by UNCTAD and the WTO.
Today, we will discuss what the international trade and investment policy communities can do to advance the Paris climate change objectives and agreements.
This discussion is taking place in very tough times.
The international policy climate for trade and investment is perhaps in as bad a shape as the “real” climate.
We are losing the will to maintain the global consensus we achieved in 2015. A fragmented, decoupled, distrustful world will never delivery the Paris agreement.
The term outlook for trade and investment is worrying, given the lingering effects of the COVID-19 pandemic, the increasing frequency of climate-related disasters, the war in Ukraine, and the prospect of a global recession next year – a ‘policy-induced’ recession, as we call it in UNCTAD.
According to our research, the number of new climate change investment projects announced in the last two quarters is already more than 10 per cent lower than last year, and declining.
And in the midst of a growing energy crisis, entire fossil fuel industries are seeing a comeback, marked by obscene and record-high profit margins.
We must reverse these trends.
We need more international trade and investment, not less international trade, and investment. But we need it in the right direction.
Towards more climate funding, especially in the developing countries, and towards more – and more effective and less disrupted – trade in the goods and service the energy transition will require.
We need development, and not geopolitics, at the driving seat of globalization. Your Excellencies,
Let me highlight some concrete examples in which our communities, and indeed our institutions, the WTO and UNCTAD, can address the enormous challenge of fighting climate change.
First of all, we must ensure that trade and investment policies are an integral part of nationally determined contributions.
That is not always the case so far, and we need to change that.
Second, we must eliminate barriers that hinder the dissemination of the goods, services, and technologies, needed for the energy transition, such as batteries, solar panels, and wind turbines.
Third, we must maintain a policy environment that is conducive to the cross-border flow of climate finance, and which promotes international investment in mitigation and especially adaptation.
The current policy environment, of rising interest rates, unprecedented south-to-north capital flight, dwindling liquidity, and insufficient investment, is the opposite of conducive.
Fourth, we must address disruptions and bottlenecks in the global value chains for renewables.
According to the International Energy Agency, for example, three fourths of the world’s production of battery cells is located in a single country.
Fifth, we must ensure that trade and investment agreements do not constitute barriers to climate action but can instead be used as tools to accelerate climate action.
Sixth, we must continue the path of empowering the decision-making capabilities of the WTO, especially when it comes to climate regulations and negotiations.
The lack of a unified and universal push for climate regulation is leading to a ‘spaghetti bowl’ of competing regulatory regimes, which is hurting developing countries and small and medium enterprises especially hard.
Maybe we should ask, Ngozi, for a kind of a “moratorium” on bilateral environmental rules while accepting a structured environment negotiation at WTO.
And seventh, finally, we must massively mobilize funding towards the developing world, so that the green transition does not become a luxury only to those that can afford it.
To achieve this, we require a deep restructuring of the international financial system.
As the UN Secretary General has said, the current financial architecture is not fit for purpose in providing the support developing countries need. I would add that it is also the case for climate action.
The whole of the UN system, and other agencies, including the multilateral development banks and international finance institutions, must spare no efforts in the so-called push from billions to trillions on climate finance.
Ladies and Gentlemen,
It is true that we are already seeing some trillions for climate finance.
Last year, sustainability-link products in global capital markets – green bonds, for example – were worth more than $ 5 trillion.
The problem is that not enough of these trillion are in developing countries in the form of actual mitigation or adaptation investment projects.
Therefore, the billions-trillions problem is not only a problem raising funds, but of channeling them to where they are needed most.
Your Excellencies, Ladies, and Gentlemen,
There is much that the international trade and investment community can do to help meet the Paris goals. And we must spare no efforts.
This year was another cruel reminder of the terrible knock-on effects climate change is already producing.
We are seeing lower harvests in the middle of a food crisis.
We are seeing uprooted electricity grids in the middle of an energy crisis.
We are seeing loss and damage that can bankrupt any state, in the middle of a debt crisis.
This is why I call on you, to help us build a Global Alliance for climate transformation, with the effective participation of all stakeholders of the global trade-investment community; and to help us build a Roadmap that can focus our current system – with its many bilateral, regional and global agreements and institutions – towards the single and shared objective of saving our planet.
I hope that our roundtable discussion today will yield some of the elements of that roadmap.
I assure you that UNCTAD, including through our partnership with the WTO, will do all we can to support our member States in the push for climate-friendly trade and investment.
I wish you all a productive, engaging, and above all, impactful, session ahead. Thank you.
