10 November 2020
Green Agenda and International Trade: From Contradictions to Opportunities

The study prepared by ITI in collaboration with the Roscongress Foundation shows main trajectories of environmental agenda in global trade. This work expands on an earlier analytical digest titled Green Economy and International Trade: On the Path to Sustainable Development.

The authors scrutinize the impact of green agenda on international trade, touching upon some other phenomena like green protectionism. The topics covered in this work are particularly relevant at the moment, given Russia’s national development goal of expanding exports and its striving to build a greener economy and strengthen its relations with the EU, the present leader in environmental agenda and Russia’s principal trade partner.

The publication mostly covers imbalances in international trade, the impact of green protectionism on global inequality, and the impact of decarbonization and low greenhouse gas emissions policies on international trade. It also studies the risks that green agenda in global trade poses to Russia and the opportunities that it provides.

Main conclusions:

· The chief dilemma over whether to offer green incentives for manufacturers and whether to introduce trade restrictions on the grounds of environmental safety, sustainable socio-economic development, and national security arises from the existing dichotomy between free trade and the nation’s health and safety.

· International regulation in the sphere of climate stands on two pillars: acknowledgment of the paramount importance of environmental issues and acceptance of economic methods as the most effective solution. In this respect, carbon emissions trading (the cap-and-trade scheme) has become a kind of flexibility mechanism intended to help countries reduce emissions. Although the commitments under the Paris Agreement are voluntary, emissions trade is rapidly developing at regional level.

· Russia, in light of its commitments under the Paris Agreement to reduce carbon emissions to 70-75% of what they were in 1990 by 2030, has the advantage of the low base effect which will help it implement the concept of low-carbon development. However, regulation in this sphere remains a pressing issue. Also, state incentives for transition to sustainable development remain necessary.

· Alongside international regulation, the trend on ecological labeling continues to grow. While ecological certification gives advantages to manufacturers, it can also be a barrier for developing and the least developed countries.

· At the moment, Russia is actively working on establishing green economy sectors. Environmental regulation is being developed. Increasingly often, large companies finance environment protection programs and introduce green technologies, thus becoming engines of greening the country’s industrial production.

See also other materials cited by the authors of this report:

· Strategies for one-planet prosperity. How to build lasting success on our finite planet

· Pay the carbon tax and breathe freely

· Voluntary National Review of the 2030 Agenda for Sustainable Development Implementation

· How an EU Carbon Border Tax Could Jolt World Trade

· State and Trends of Carbon Pricing 2020