Greening International Trade and Investment

Trade and investment underpin the remarkable development story of many G20 economies, but this progress has come with environmental costs that contribute to climate change. Many developing economies of the G20, especially those in Asia, are net exporters of carbon emissions to developed economies. However, with the right mix of policies, trade and investment could be part of the climate solution. For this to happen, priority should be given to promoting freer trade in environmental goods and services; putting in place appropriate regulations, standards, and certification schemes to incentivise green investment; strengthening international and regional cooperation including through climate commitments in trade agreements and investment treaties; and utilising market-based approaches such as carbon pricing mechanisms. This brief draws heavily from the analyses and discussions contained in the Asian Development Bank’s Asian Economic Integration Report 2023, of which the authors of this brief were part.