Connections Between Climate Change and International Trade

Abstract

Few people in the rich world may want to volunteer to reduce their living standards. At the same time, it is difficult to ask people from parts of the world that are still developing to sacrifice their chance to become rich. A middle-ground compromise could be technology that brings economies away from using fossil fuels as their principal source of energy. Technology could be instrumental to understand the links between international trade, sustainable development, and environmental protection, which have become increasingly important to understand how we can reach a sustainable future. We know by now that international trade can help decarbonize the economy and create jobs. This duality can be reached through the liberalization of trade in green goods, the circular economy, carbon border adjustment mechanisms (CBAM), or the blue economy, to mention but a few.

Keywords: international trade, climate change mitigation, sustainability, carbon border adjustment mechanism, technology

JEL Classification: K33, Q2, Q4, Q5