Muhammad Asif Noor
As climate change increasingly exerts its devastating impact across the globe, the need for a unified, sustainable economic transition becomes more urgent by the day. Yet, geopolitical rivalries and protectionist trade policies threaten to derail this critical shift. Despite the global consensus on the necessity of addressing climate change, political agendas are creating barriers that could significantly slow the progress toward a greener future.
In the past few years, the global economy has been buffeted by a series of crises: a prolonged pandemic, geopolitical tensions, and the resurgence of protectionism. Now, as nations struggle to rebuild their economies, some have turned to trade barriers as a means of safeguarding domestic industries. The European Union’s recent decision to impose steep tariffs—up to 45.3%—on Chinese electric vehicles (EVs) is a glaring example of how short-term political and economic interests can clash with long-term climate objectives.
While these measures are often justified as necessary steps to protect local industries from unfair competition, they come with significant risks. Such policies threaten the fragile multilateral trading system that has historically enabled countries to collaborate on shared challenges, including climate change. The question is: can the world afford to allow trade wars to hinder the collective effort needed to combat one of the greatest existential threats of our time?
Protectionist trade policies, disguised as climate action, risk undermining international cooperation. By targeting imports of green technologies, such as EVs and solar panels, these policies could slow the global diffusion of critical innovations needed for the energy transition. Yi Xiaozhun, former Deputy Director-General of the World Trade Organization (WTO), warns that such unilateral measures could further destabilize the already fragile global trading system, potentially unraveling decades of progress.
This is particularly concerning given the scale of the climate crisis. The transition to renewable energy and sustainable industries depends on the rapid, widespread deployment of green technologies. By politicizing climate action, countries risk not only delaying their own progress but also undermining global climate goals. A fragmented approach, driven by narrow national interests, could result in a patchwork of inconsistent policies that fail to address the global nature of climate change.
Rather than succumbing to protectionism, nations should embrace competition in the green technology sector. Erik Solheim, Co-Chair of the Europe-Asia Centre and former Executive Director of the UN Environment Programme, argues that competition can be a powerful driver of innovation and efficiency. Europe, for instance, should view China’s dominance in the production of solar panels and EVs not as a threat but as an opportunity to improve its own industrial capabilities.
China’s role in producing high-quality, affordable green technologies has been pivotal. These products are essential for countries looking to meet their climate targets. Instead of imposing barriers, policymakers should focus on creating a fair and competitive market environment. Encouraging competition will not only drive down costs but also accelerate technological advancements, benefiting the global effort to curb emissions.
The demand for green technologies is surging. According to the International Energy Agency (IEA), the world needs to install 820 gigawatts of new photovoltaic capacity annually to meet climate targets. Yet, current production levels fall significantly short. Similarly, global EV sales are expected to reach 30 million units by 2027, but supply remains constrained. China, a leader in green manufacturing, plays a crucial role in bridging this gap.
However, protectionist measures like tariffs can exacerbate supply shortages, driving up costs and delaying deployment. This is a lose-lose scenario: consumers face higher prices, and the planet suffers from slower progress in reducing greenhouse gas emissions. To avoid this, the global community must prioritize open trade and cooperation, ensuring that green technologies are accessible and affordable.
The complexity of the climate crisis demands a coordinated international response. Trade policies should be aligned with climate goals, fostering an environment where innovation can thrive across borders. Enhanced cooperation between major economies, particularly the EU and China, is vital. Both regions have the industrial capacity and technological expertise to lead the global transition to sustainability. However, this can only be achieved if they work together to create fair and open markets.
The WTO, despite its challenges, remains a critical platform for resolving trade disputes and promoting fair competition. Strengthening this multilateral institution is essential to prevent trade tensions from undermining climate action. By adhering to WTO rules and fostering transparent trade practices, nations can ensure that climate policies are not weaponized for economic gain.
The intersection of trade and climate policy is a delicate balancing act. On one hand, nations must protect their industries and workers; on the other, they must recognize the global nature of the climate challenge. Protectionism may offer short-term economic relief, but it risks long-term harm by delaying the green transition and exacerbating climate risks.
To navigate this complex landscape, policymakers must adopt a holistic approach that integrates economic, environmental, and geopolitical considerations. The path forward lies in fostering open competition, enhancing international cooperation, and strengthening multilateral frameworks. Only by aligning trade policies with climate objectives can the world hope to achieve a sustainable and equitable green economy. The stakes could not be higher, and the time for decisive, cooperative action is now.
(The writer is Founder of Friends of BRI Forum, Senior Advisor to Pakistan Research Centre at Hebei Normal University in China, Co-Founder of the Alliance of China-Pakistan Research Centres, and Senior Fellow at the Centre for CPEC Studies at Kashi University in China).
