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Carbon markets: leveraging the interface between climate policy and trade policy to secure climate finance

Brandi, Clara / Jodie Keane
External Publications (2023)

prepared for the Workshop “Trade and Climate Action: Shifting the Paradigm for a Just Transition and Sustainable Development” in Bridgetown, Barbados, 2-5 May 2023

Securing the integrity of sovereign carbon markets within the Paris Agreement (PA) has been paramount within the continuing negotiations to conclude Article 6 by COP28. Additional pressure comes from the need to drastically scale up sources of climate finance to  address the goals of the PA. Whilst some of the issues regarding carbon markets, trade in carbon and carbon standards are finally becoming more visible within different discussions related to environmental sustainability at the World Trade Organisation, it is fair to say that these  issues have risen to prominence rather more defensively, than proactively. This paper argues that a more proactive approach is needed to ensure development friendly carbon markets, especially for Small Island Developing states (SIDS) within the context of nature-based  solutions; it explores the interface between climate and trade policy to secure climate finance for SIDS and provides policy recommendations to this effect.

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