Regarding Alan Beattie’s column “Emission impossible and the trade conundrum of calculating carbon” (Trade Secrets, FT.com, January 22),
I am happy to report that the World Trade Organization is not as sclerotic as your columnist claims and in fact the WTO secretariat has embarked on a novel way to combine trade and climate solutions on this very matter.
At the behest of the industry, we took the steel sector as a starting point in tackling the trade conundrum of counting carbon. Working together with standards bodies, international organisations and the private sector we were delighted that more than 40 organisations endorsed the “steel standards principles” at COP28.
For the first time, players across all major steel producing regions and production routes have committed to greater alignment in counting emissions, which can head off trade disputes.
While harmonisation might be appealing as a first best, different approaches seem inevitable to measure emissions at the product, process or company level, whether for upstream buyers, tax authorities or shareholders. But regardless of approach, for trade to take place we need to trust (and verify) that one tonne of carbon counts as the same in Washington, Beijing or Paris.
This is why we are working with our partners to promote interoperability between measurement approaches and data, to give the market the information it needs to compare and choose the best decarbonisation paths.
And this is just part of our improved conditioning in the climate and sustainability space. The WTO secretariat also proposed to the UAE presidency the first ever “trade day” at a climate conference during COP28 and presented a list of trade policy tools for climate action for governments to consider.
Our director-general also spearheaded the first multi-agency task force on carbon pricing, which has just kicked off its work.
At any rate, I am grateful that you have spotlighted this important problem. Come and join us at the forthcoming 13th ministerial conference, in Abu Dhabi.
And we will certainly be back at COP29 with new developments on carbon measurements.
Jean-Marie Paugam
Deputy Director-General
World Trade Organization, Geneva, Switzerland
