Trade plan for climate-adaptive progression
The Carbon Border Adjustment Mechanism (CBAM) is a hot topic in international trade discussions, aimed at levying carbon costs on imports from countries with less stringent climate policies. However, its implementation raises concerns for developing countries, particularly those in Africa.
The CBAM, if not carefully designed, could pose trade challenges for countries with limited capacities to decarbonize industries quickly or to comply with complex carbon accounting measures. African countries risk facing increased costs for exports to markets implementing CBAM, potentially impacting their trade competitiveness and economic development.
To mitigate these adverse effects, international cooperation, capacity-building, and potentially exemptions or differential treatment in CBAM design are needed. This approach would protect developing economies while encouraging their low-carbon transitions.
Trade rules, on the other hand, can foster equitable development and facilitate the shift to low-carbon economies in developing countries. The World Trade Organization (WTO) can contribute by reducing tariffs on labor-intensive exports from developing countries, abolishing export subsidies, and encouraging liberalization under formulas suited to developing economies. Such measures help developing countries integrate better into global markets, supporting sustainable economic growth.
Trade rules that allow preferential market access and simplified eligibility criteria enhance exporters’ competitiveness, which can be leveraged to promote green industries and services. Incorporating sustainability principles into trade agreements also helps align trade with environmental objectives, fostering cleaner technologies and renewable energies.
However, the CBAM is viewed as a protectionist measure by many developing countries and questioned for its alignment with the principles of the 2015 Paris climate agreement. The International Maritime Organization's carbon emissions tax on shipping falls short of the more ambitious carbon levy developing economies had advocated.
The race to gain a competitive edge in green industries is partly driven by China's dominant position over the past decade through a combination of fiscal expansion, strategic subsidies, and control over critical minerals and key supply chains. A new climate-trade framework should support decarbonisation across industries while upholding the principles of justice and solidarity, ensuring that developing countries are actively supported on their path to a more sustainable future.
Regional trade agreements and coalitions, such as the AfCFTA (African Continental Free Trade Area), could help foster inclusive development and climate adaptation. The AfCFTA could help unlock new pathways to food sovereignty, climate adaptation, and long-term stability across Africa.
In conclusion, while trade rules and policies supporting market access, special and differential treatment, and sustainability integration can promote equitable development and climate-friendly shifts, mechanisms like the CBAM require careful implementation to avoid unintended detrimental impacts on developing countries, especially in Africa.
References:
[1] Fakir, S. (2025). The Carbon Border Adjustment Mechanism and Developing Countries: A Delicate Balance. Project Syndicate.
[2] United Nations Conference on Trade and Development (UNCTAD). (2025). Trade and Climate Change: Opportunities and Challenges for Developing Countries.
[3] World Trade Organization (WTO). (2025). Trade and Climate Change: A Review of WTO Work and Way Forward.
[4] International Trade Centre (ITC). (2025). Green Trade: Opportunities and Challenges for Developing Countries.
- The Carbon Border Adjustment Mechanism (CBAM) could present trade challenges for countries with limited decarbonization capacities, particularly Africa, risking increased export costs and potential impacts on trade competitiveness and economic development.
- International cooperation and capacity-building, potentially including exemptions or differential treatment in CBAM design, are needed to protect developing economies and encourage their low-carbon transitions.
- Trade rules can foster equitable development and facilitate the shift to low-carbon economies, with the World Trade Organization (WTO) playing a role by reducing tariffs, abolishing export subsidies, and encouraging trade liberalization tailored to developing economies.
- Preferential market access and simplified eligibility criteria can improve exporters' competitiveness, promoting green industries and services and aligning trade with environmental objectives.
- The CBAM is viewed as protectionist by many developing countries and questioned for its alignment with the Paris climate agreement principles, while the International Maritime Organization's carbon emissions tax falls short of the proposed ambitious carbon levy.
- China's lead in green industries, achieved through fiscal expansion, strategic subsidies, and control over critical minerals and key supply chains, sets an example for a new climate-trade framework that supports decarbonization across industries while upholding justice and solidarity.
- Regional trade agreements and coalitions, like the AfCFTA, could help foster inclusive development and climate adaptation, such as unlocking new pathways to food sovereignty, climate adaptation, and long-term stability across Africa.
- Incorporating sustainability principles into trade agreements can foster cleaner technologies and renewable energies, aligning trade with environmental objectives and promoting a more sustainable future.
- References for further study on the topic of trade, climate change, and developing countries include works by Fakir, UNCTAD, WTO, and ITC, discussing opportunities, challenges, and way forward in these areas.
- The energy transition, climate adaptation, and sustainable lifestyle choices can be influenced and supported by personal finance, environmental science, data-and-cloud-computing, and technology advancements.
- Careers in the industry, education, and self-development sectors, as well as the general news media, can contribute to promoting a better understanding and action on climate change, bringing about a more sustainable business and travel landscape.
