Trade and Climate Change

For decades there has been a debate over the interplay between free trade and environmental performance. This debate flows from the idea that free trade and economic growth go hand in hand. A long-standing body of theory asserts that nations prioritizing economic growth will suffer environmental degradation from the associated industrialization, pollution, and natural resource depletion. Competing theories of sustainable development suggest that economic growth generates wealth and enables countries to invest in environmental infrastructure and to mitigate environmental degradation through enhanced access to advanced technology, training, and best environmental management practices.

In 2011, the Yale Center for Environmental Law and Policy released a first-of-its-kind empirical study on the relationships between trade and the environment. Since then, the Center has continued this work with a new report—Exploring Trade and the Environment: An Empirical Examination of Trade Openness and National Environmental Performance—which shows that decision-making needs to move beyond the broad definitions of “trade openness” and “environmental performance”. Instead, our research recognizes the importance of a more refined interplay between international trade flows, liberalization policies, good governance, and disaggregated environmental factors such as environmental health, ecosystem degradation, and climate change. We find evidence that trade openness and economic growth can have both positive and negative empirical environmental associations.

Building on the findings of this most recent report – as well as decades of research and policy work in both climate change and the “trade and environment” interface – the Center recently released a collection of essays, Cool Heads in a Warming World: How Trade Policy Can Help Fight Climate Change. Written by some of the top researchers and practitioners in the field of international trade and global sustainability, this research delivers legal and policy analysis that explores how a transformed trade regime might reinforce rather than undermine the global climate change agenda and Sustainable Development Goals efforts.