Opening up post-COVID-19 free trade to save the planet

American refined silicon; German electronic power inverters; Japanese photovoltaic cell manufacturing; British financial services. What do these elements all have in common? They each contribute in one way or another to the creation and distribution of a solar panel. They also represent the international supply chain that has not only brought down the cost of solar energy in recent years, but also renewable energy more broadly.

Unfortunately, the COVID-19 pandemic has not only shaken renewable energy supply chains across the globe, it has also created a public distrust of relying too much on foreign countries for our energy and other needs. But, we must not ignore the benefits that such global supply chains have brought to the rapid and cost-decreasing deployment of clean forms of energy around the world.

We often hear about the global nature of climate change — a threat all countries must face together. This global aspect is undeniably true.The potential impacts of a changing climate represent a challenge the entire international community needs to address. As parts of Bangladesh face coming under water, so too does Florida. The million-dollar question is: How can countries in the West incentivize climate action not only domestically, but also abroad? Indeed, there is no use in the United States or Europe reaching net zero by 2050, if countries such as India and China do not do the same. 

As my recently published book “Green Market Revolution” argues, one particularly promising approach to unleashing a global transition to cleaner energy is through the simple, yet under-appreciated, concept of free trade. We must build on the successes of clean energy global supply chains and further accelerate their impact. For centuries, and especially in the latter half of the 20th century, global free trade has contributed to lifting billions out of poverty, accelerating innovations across the globe and sharing valuable knowledge across cultures.

The international fight against climate change would benefit in a similar manner. Not only have free trade agreements previously contributed to environmental advancement, such as under George W. Bush’s Trade Act of 2002, but established agreements with countries such as Colombia, South Korea and Peru helped to reduce airborne chemicals, deforestation, illegal logging and more. It is only by sharing ideas and innovations across borders that the best and most efficient clean technologies will emerge. The beauty of the international trading system is that different countries with different skill-sets and areas of expertise can all contribute in their own way, cost-effectively, to producing parts of these technologies. American silicon, German inverters, Japanese cells and British financial services.

Even despite the bleakness of the COVID-19 devastation, there are significant opportunities for America to become a global leader in clean free trade. The first of these is an already-existing framework called the Agreement on Climate Change, Trade and Sustainability (ACCTS). Announced in 2019 by the governments of New Zealand, Fiji, Norway, Costa Rica and Iceland, ACCTS puts forward three key policies: the removal of all tariffs on environmental goods and services, the elimination of fossil fuel subsidies and the development of voluntary mechanisms for eco-labeling. In doing so, these five countries hope to unleash a veritable market of environmentally beneficial goods and services, by tearing down barriers to their global free trade. Instead of placing tariffs on the very goods that will help reduce our emissions, the Trump administration should become a leading player in it. The ACCTS framework would provide both a financially beneficial outlet for American manufacturing and technology innovations, but also a source of cheaper and higher-quality international environmental products, such as parts for solar panels and wind turbines. Both the economy and global environment would benefit.

Secondly, with the United Nations COP26 conference set to be held in the United Kingdom in November 2021, America would do well to use the opportunity to foster closer ties with post-Brexit Britain, along these lines. Indeed, with Britain and the U.S. together representing over a quarter of world GDP, signing a free trade agreement that includes crucial environmental provisions would be hugely significant for the development of clean energy worldwide. Indeed, it would be a sign of genuine climate leadership on behalf of two of the most influential countries in our international system, and would encourage other countries to follow suit. Moreover, in an increasingly multipolar world order, a foreign policy that emphasizes environmental protection and cooperation would provide a refreshing change of scene, strengthening the hand of those countries with honest intentions, over more unscrupulous international players. 

Ultimately, as the world increasingly looks toward cleaner forms of energy in the fight against climate change, we need not resort to heavy-handed international interventions or expensive domestic policies. Post-COVID-19 clean free trade policy can accelerate both clean energy innovation internationally, as well as lay the foundations of a sustainable American economic recovery.

Christopher Barnard founded the British Conservation Alliance and now serves as the National Policy director at the American Conservation Coalition. He co-published the book “Green Market Revolution.” Follow him on Twitter @ChrisBarnardDL.