UN Trade and Development (UNCTAD) issued an urgent call for world leaders gathering at the upcoming United Nations Climate Change Conference (COP30) to fully integrate trade policy into climate action, citing new data that shows misaligned global markets are slowing the low-carbon transition.
The latest Global Trade Update, released ahead of COP30 in Belém, Brazil, from 10 to 21 November, demonstrates that while trade is a powerful driver for meeting the Paris Agreement goals—limiting global warming to 1.5 °C—outdated tariffs and standards are acting as significant barriers to progress.
“Trade is no longer just an economic engine; it is a fundamental climate policy tool,” said a UNCTAD Official. “Our data clearly shows that the low-carbon transition is economically viable, with green markets booming and clean energy costs plummeting. But this essential momentum is being held back by outdated barriers. As the world gathers for COP30, we must urgently integrate trade policy into national climate plans to accelerate the transition and ensure its economic benefits flow, especially to developing nations.”
The UNCTAD report highlights a clear market shift towards sustainability, providing a strong economic case for rapid policy alignment:
- Soaring Green Exports: Exports of environmental goods reached an estimated $2 trillion in 2024, accounting for 14% of global traded manufacturing goods.
- Cost Efficiency in Clean Energy: The average global cost of producing electricity from new solar projects dropped by 41% between 2010 and 2024. Furthermore, onshore wind generation is now 53% cheaper than power derived from fossil fuels.
- Cooling Market Potential: The sustainable cooling market is valued at $600 billion and could deliver up to $8 trillion in benefits for developing countries by 2050. Between 2018 and 2023, trade in core cooling technologies like thermostats and insulating glass saw sharp increases of 32% and 43%, respectively.
Despite the clear economic incentives, the UNCTAD analysis identifies key policy obstacles that disproportionately affect the poorest nations:
- Solar and Wind Components: Average tariffs on solar and wind components range from 1.9% in developed economies to 7.1% in Africa, rising to 7.6% when non-tariff measures are included. These high costs slow the deployment of affordable clean energy where it is needed most.
- Plastic Substitutes: Tariffs on plant-based plastic substitutes, averaging 14.4%, are double the rate applied to conventional fossil-fuel-based plastics, actively discouraging the shift to sustainable material alternatives.
UNCTAD calls on governments to use the COP30 negotiations to commit to eliminating trade barriers on key environmental goods, harmonizing product standards, and using trade frameworks to incentivize low-carbon production. Integrating trade policies can not only speed the shift to low-carbon economies but also diversify exports and generate essential revenue for climate adaptation measures globally.
