International trade rules are reshaped, what should green competitiveness be done?

On September 12, the 2024 China International Fair for Trade in Services (hereinafter referred to as the Fair) was held in Beijing. Climate trade is a cutting-edge hot spot in the field of global trade in services, highlighting the importance of green and low-carbon characteristics in international economic and trade cooperation, and also has a profound impact on the world trade pattern and related industrial and supply chains. At the first theme forum of the CIFTIS-the Global Green Economy Development Forum, relevant experts discussed in depth the coordinated and integrated development of climate action, international trade and green economy, and sought ways to promote high-quality global development.

Green competitiveness is reshaping international trade rules

Against the background of the global response to climate change and promoting the goal of "carbon neutrality", climate trade rules such as the EU CBAM (Carbon Border Adjustment Mechanism), the Battery Act, the UK CBAM, and shipping carbon emission reduction have attracted the attention of the international community.

Qian Keming, former deputy minister of the Ministry of Commerce, believes that the current international rules on carbon governance in the field of trade have formed a basic framework, including multilateral incentive mechanisms, unilateral penalty mechanisms, and market transaction mechanisms. The EU CBAM is a unilateral penalty mechanism. Representative of the mechanism.

From the official entry into effect on October 1 last year to the official collection of carbon border adjustment taxes and fees during the implementation period on January 1, 2026, the EU CBAM has a great impact on my country's import and export trade. Taking crude steel exports as an example, after calculations, my country will have to pay an additional 37.26 euros per ton if it exports crude steel products to the EU after 2026. After 2034, an additional 140.13 euros will be paid per ton of crude steel exported to the EU.

The World Bank once released a report stating that nearly a quarter of global carbon emissions are trade-related. Li Ting, managing director of the Rocky Mountain Research Institute and chief representative of the Beijing Representative Office, believes that the climate issue has not been a purely environmental issue from the beginning, but an energy issue and a development path issue. It is a typical economic issue.

Under the goal of promoting green development to address climate change, incorporating climate action into international trade and formulating international trade rules by imposing carbon tariffs has undoubtedly become a very groundbreaking measure.

Sha Zukang, former Deputy Secretary-General of the United Nations and Honorary Chairman of the International Green Economy Association, said that carbon tariffs on climate trade send a message to the world that green competitiveness characterized by green and low carbon levels is reshaping global industrial chains, supply chains and international trade rules.

Rule making must adhere to the principle of common but differentiated responsibilities

Actively responding to climate change and promoting the realization of "carbon neutrality" are the common goals and actions of all countries in the world. In March this year, the United Nations Environment Program released the 2024 edition of the Global Resource Outlook. Tu Ruihe, chief representative of the United Nations Environment Program in China, believes that the content on resource footprints deserves attention.

The report shows that high-income countries have the highest per capita resource footprint, which also includes carbon footprints. Currently, the per capita resource consumption of high-income countries is 6 times that of low-income countries, and the per capita climate impact is 10 times that of low-income countries.

Sha Zukang said that the historical and actual emission responsibilities of developed and developing countries are different, and their development levels and capabilities are also different. Therefore, the formulation of an international climate governance mechanism should adhere to the principle of common but differentiated responsibilities and different capabilities.

However, the current climate trade carbon border adjustment mechanism is a typical "producer responsibility mechanism." Sha Zukang said that in view of the differences in international trade and industrial division of labor, the international community should promote the principle of "shared responsibilities among producers and consumers", reach and establish a carbon emission liability mechanism based on this principle, and formulate international climate trade rules.

"Only such principles, mechanisms and rules are in line with climate justice transformation, can they more effectively encourage global industrial and supply chains to jointly reduce emissions, and achieve climate goals and sustainable prosperity in international trade." Sha Zukang said.

Global climate governance is for the sustainable development of the global economy. Climate action and economic development must take into account each other and advance in a balanced manner. On the path of green and low-carbon transformation of the global economy, promoting the stability and development of industrial and supply chains is beneficial to all parties. Actively building consensus on multilateral cooperation and jointly building win-win international relations is the only way to solve problems.

Qian Keming believes that any unilateral mechanism will create trade frictions and differences between all parties. It is necessary to reach consensus on multilateral occasions and within multilateral frameworks, based on the development status, funding levels and progress of green technologies of each country, so as to promote global climate change responses.

Sha Zukang also believes that "international high-standard economic and trade rules" must be fair, just and reasonable rules, and are formulated by the joint participation of all parties or acceptable to all parties.

Green trade will form new growth force for trade

Today, climate and environmental issues are increasingly inseparable from economic and trade issues. Building a globally competitive green industrial chain and supply chain is an important measure to deal with climate change and an inevitable choice to promote high-quality and sustainable economic development.

"We have made calculations that China's electrolytic aluminum industry will reach its carbon peak by 2025 at the latest." Ge Honglin, president of the China Nonferrous Metals Industry Association, said that carbon emissions from electrolytic aluminum are the key to determining whether the aluminum industry can achieve a carbon peak.

In 2023, my country's aluminum industry will emit 530 million tons of carbon emissions, of which electrolytic aluminum carbon emissions will be 420 million tons, accounting for 79.2%. After determining that electrolytic aluminum should be the main direction of the industry's carbon peak, the aluminum industry has formed four major driving roles: scientific and technological progress, marketization, legalization, and industry self-discipline to ensure the completion of the 2025 carbon peak goal.

Ge Honglin introduced that my country's aluminum industry is currently at the forefront of the world's green and intelligent development. The reform of the electrolytic aluminum supply side and the expansion of aluminum applications have been unanimously praised by the domestic and foreign industries, and this has created a huge market dividend for the world.

In recent years, my country has intensively introduced a series of policies around "carbon emission management" and "international trade". From the "Implementation Plan on Establishing a Carbon Footprint Management System" jointly issued by the Ministry of Ecology and Environment and other 15 ministries and commissions to the "Opinions of the Central Committee of the Communist Party of China and the State Council on Accelerating the Comprehensive Green Transformation of Economic and Social Development", they all emphasize the need to build a product carbon footprint management system and promote mutual trust in international rules on product carbon footprint and proactively align with international high-standard economic and trade rules.

Qian Keming said that in promoting the development of green trade, my country has a very good foundation in terms of policies, trade structure, industrial chain, etc. "It is foreseeable that with the great attention of governments at all levels, green trade will accelerate its exploration and development, and will surely form new growth and competitiveness in trade."

As for the development of green trade, the main efforts of enterprises cannot be ignored. Qian Keming believes that enterprises should pay close attention to the international situation, adjust export strategies in a timely manner, and at the same time strengthen technological innovation and enhance product competitiveness, especially increase investment in research and development of green and low-carbon technologies, and simultaneously promote the digitalization and intelligent transformation of enterprises.

"Digitalization and intelligence are not only the direction of future trade development, but also very important tools for green transformation. Digitalization and greening include paperless, which is itself a green transformation." Qian Keming said.