After two years of stonewalling, governments agreed at COP30 to hold a series of annual discussions about how their trade policies can enable emissions reductions while helping, rather than hindering, economic development. But analysts warn the process may not be able to achieve much in practice.
Since COP28 in Dubai in 2023, emerging economies including China, India and South Africa have been pushing – in the face of resistance from developed countries – to get the UN climate negotiations to discuss “unilateral trade measures”. These, they argue, include the European Union’s imminent tax on imports of certain high-emission products, known as the Carbon Border Adjustment Mechanism (CBAM).
The Brazilian presidency of COP30 bundled trade and other contentious issues such as finance and emissions-cutting together in the summit’s most high-profile outcome: the “Global Mutirão” decision of the Belém political package.
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Under that, governments agreed to hold dialogues on opportunities, challenges and barriers for international cooperation on trade and climate at the mid-year June talks in Bonn for the next three years as well as an additional “high-level event” in 2028, and then produce a report.
Besides governments, other relevant bodies will be asked to participate in the dialogues, including the International Trade Centre, the United Nations Conference on Trade and Development and the World Trade Organization, the decision says.
On its own initiative, the Brazilian government has also launched what it calls an Integrated Forum on Climate Change and Trade, a three-year effort open to all countries that will bring together officials working on the two issues to consider how trade can support sustainable economic growth.
It is expected to develop ways for trade and climate policies to better intersect across key areas such as the energy transition, the fight against deforestation and carbon accounting
Mixed reactions to trade outcome
The formal move to broaden UN climate discussions on trade beyond their previous narrow placing under negotiations on climate response measures and just transition met with a mixed reaction.
One African negotiator, who is critical of the EU’s carbon border tax plan, told Climate Home News that while the UN dialogues are “a start, it is weak to not have a full COP item on it”. “What’s the point if it’s only at Bonn sessions and not going to COP?” they asked. “It’s like they want to kill it in a polite way.”
Aaron Cosbey, a climate and trade researcher at the European Roundtable on Climate Change and Sustainable Transition, said the dialogues are “very unlikely to have any impact” because most trade-climate topics are “just too hot to handle”.
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But Li Shuo, head of the China Climate Hub at the Asia Society Policy Institute, said he hoped the new discussions would help define a constructive role on the issue for the UN climate process, while Arunabha Ghosh, head of the Delhi-based Council on Energy, Environment and Water, said the dialogues represented “progress”.
Ellie Belton, E3G’s trade and climate lead, said referencing trade was a significant step towards addressing trade tensions in UN climate talks. Dialogues, she added, could “offer the space many countries have been calling for to continue collaborative discussions on both the opportunities and challenges, which should help to rebuild trust and unlock enduring solutions”.
The European Union agreed to these dialogues after references to unilateral trade measures – which the bloc regards as a loaded term targeting the CBAM – were downgraded. EU climate commissioner Wopke Hoekstra had told a press conference at COP30 that “we’re not going to be lured into the suggestion that [the EU’s carbon border tax] is a unilateral trade measure, and in that realm we’re also not going to discuss it.”
The final COP30 deal just repeats a previous agreement that “measures taken to combat climate change, including unilateral ones, should not constitute a means of arbitrary or unjustifiable discrimination or a disguised restriction on international trade”.
Europe’s contentious carbon border tax
From January 1 2026, the EU will tax imported cement, steel, chemicals, aluminium, hydrogen and fertilisers at a rate depending on the amount of greenhouse gases emitted during their production. The UK will introduce an almost identical policy a year later.
European countries argue that the new levy will level the playing field and ensure companies do not move their production out of the continent to countries with lower carbon taxes and weaker environmental regulations.
They have some international support, with Vanuatu’s climate minister Ralph Regenvanu telling Democracy Now at COP30 that measures such as this are important because they pressure countries to reduce emissions, rather than just relying on voluntary action as much of the Paris Agreement does.
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Nonetheless, China, India, Russia, South Africa and others have argued that the European scheme is unfair, as developing countries cannot afford to clean up these industries on their territory or pay higher prices for green versions of the affected products.
The EU’s recent promise to offer “flexibilities” on the CBAM tax to the US also angered many developing countries, particularly as the bloc rejected calls to exempt the world’s least developed countries.
David Ryfisch, co-head of international climate policy at the Germanwatch advocacy group, praised the border tax for helping European industries decarbonise and pressuring governments outside Europe to improve their climate policies.
But, he said, the EU could have made the policy “more acceptable to other countries if it had consulted with them earlier and if the collected revenues were re-channelled to developing countries for them to accelerate decarbonisation domestically”.
Other issues that could be tackled by these UN climate dialogues and the Brazil-led forum include tariffs on green economy goods such as solar panels. The US has imposed tariffs on panels from China and some other parts of Asia. Meanwhile, other countries including India have introduced tariffs on solar panels in an attempt to encourage domestic manufacturing of clean energy equipment.
The post Trade breaks into agenda of UN climate talks – but will it have teeth? appeared first on Climate Home News.
Trade breaks into agenda of UN climate talks – but will it have teeth?
Cleaner cooking projects in the UN carbon market will have to set aside a share of their credits to insure against the risk that the trees they save are lost to fire, drought or logging, after the market’s regulator rejected calls to exempt the sector.
The requirement is part of a new rulebook that the Paris Agreement carbon market regulator – the Article 6.4 Supervisory Body – approved last Friday for programmes that aim to cut emissions by distributing new and cleaner cookstoves in regions that still burn wood or charcoal for cooking.
These are the UN mechanism’s first rulebooks for cookstoves, one of the carbon market’s most popular credit types and also one of its most criticised for overstating climate benefits.
They consist of two methodologies: one for programmes that aim to cut greenhouse gas emissions by distributing more efficient cookstoves that burn less wood or charcoal, and a separate methodology for projects shifting households to lower-emissions cookers running on electricity or liquid petroleum gas (LPG).
Mkhuthazi Steleki, the South African chair of the Supervisory Body, said “this decision gives cleaner cooking projects a new pathway under the UN carbon market, with clear rules to ensure that each credit represents a real and credible emission reduction”.
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Exemption push rejected
More efficient cookstove projects earn credits based on the amount of carbon they save by preserving trees that would have otherwise been cut down and burned for fuel. But if those trees later burn in a wildfire or are logged, the carbon stored would be released anyway, erasing the climate benefits of the credits.
Several carbon credit developers, conservation NGOs and the UN Environment Programme (UNEP) disputed that cookstove projects face this risk, in what critics described as a “coordinated lobbying campaign”.
They argued that, unlike forest protection schemes, this type of credit represents a “flow” of avoided emissions rather than a “stock” of stored carbon that can be released. They also warned that requiring a buffer would impose disproportionate costs and undermine the financial viability of these activities.
But the UN carbon market regulator was not persuaded by the argument. It decided that projects would have to protect against this reversal risk by handing over a percentage of credits to a so-called “buffer pool” instead of selling them.
‘New paradigm’
The amount of credits to be given up is calculated by applying different methods for natural risks, like wildfires, droughts or hurricanes, and human-caused ones, such as logging or land clearing.
For natural risks, project developers will need to apply local risk values derived from new modelling published by a group of independent scientists.
Campaigners have broadly welcomed the decision. Federica Dossi, an expert at Brussels-based advocacy group Carbon Market Watch, said it sets a new paradigm for calculating reversal risk based on empirical data. “This approach is grounded in science and we hope to see this now being adopted by other carbon crediting mechanisms in the voluntary market,” she added.
Backers claim this method is more rigorous than current practice in the voluntary carbon market, which largely relies on expert guesswork.
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Pushback over science
As Climate Home News previously revealed, the same industry and NGO groups that sought an exemption from the “buffer pool”, along with some corporate buyers, criticised the use of a study backed by the UN carbon market’s experts that recommended the new risk assessment approach.
The groups pushed for more flexible rules that would have allowed natural risk values drawn from other sources, including national databases, or from the project developers themselves.
While the Supervisory Body rejected this approach, it gave project developers and countries the option to propose alternative values that would first need to be vetted by the mechanism’s expert panel and then approved by the regulator.
A carbon market expert told Climate Home News that, while it is too early to say how this provision will be used, they expect requests will have to be backed up with solid scientific evidence, lowering the risk of unfounded claims.
Policy discounts questioned
To guard against human-caused risks, projects will need to apply a flat 20% value set by the Supervisory Body, at the bottom of the 20-45% range recommended by its technical experts ahead of last week’s meeting.
That value can be further reduced by up to two-thirds if the host country has an emission-reduction plan covering forests, a long-term climate strategy and a framework for the UN’s REDD+ forest protection scheme.
Injy Johnstone, senior research fellow at the Munich-based Max Planck Institute, said that, while these are important governance measures, their existence does not necessarily demonstrate that the underlying risk of forest carbon loss has been reduced.
“It is important to distinguish between evidence of actual risk reduction and assumptions about the effectiveness of policy commitments,” she added.
Moving target
A UN source told Climate Home News that, under the approved formula, improved cookstove projects must set aside at least 9% of credits linked to saved wood if they operate in the lowest-risk areas and the host country can claim all available discounts. The share of credits rises significantly in regions with high natural risk values, such as Guyana, Sri Lanka and Timor Leste, or that do not have REDD+ programmes.
These factors could change in the future as the Supervisory Body asked its technical experts to recommend revisiting the risk values “should credible new evidence arise”.
Climate change is likely to make forest destruction events, such as wildfires or hurricanes, more frequent and more severe in certain regions. Meanwhile, national policies on forest protection can shift significantly depending on government changes.
Johnstone said the UN carbon market needs periodic reassessment to respond to new evidence showing that previously assumed levels of risk were too low.
“The integrity of credits is not guaranteed simply because a reversal risk tool exists,” she added. “The real test will be whether the mechanism provides equivalent atmospheric protection over time, rather than simply introducing another layer of accounting requirements”.
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UN carbon market forces cookstove projects to protect against forest loss