The UN Environment Programme (UNEP), with the International Resource Panel (IRP), published a discussion paper to help policymakers better understand the linkages between trade and resource consumption. The paper finds unchecked international trade has a damaging effect on the planet, but appropriate trade measures can enable a less resource-intensive economy.

Titled ‘Sustainable Trade in Resources: Global Material Flows, Circularity and Trade,’ the paper is rooted in a need to better understand the linkages between trade and resource consumption. UNEP highlights that “the material required for trade was three times that of direct trade” in 2017, with 35 billion tons of material resources being extracted globally to produce 11 billion tons of directly traded goods. The statistic lends credence to IRP research that shows an “observed shift in environmental burdens from high-income importing countries to low-income exporting countries.”

Global trade policies must protect the environment not only for the sake of our planet but also for the long-term health of our economies.

Accordingly, the paper builds on the work of UNEP’s Environment and Trade Hub to increase understanding among policymakers regarding trade flows of material resources—including their environmental impacts—and trade’s ability to contribute to the transition to a greener, more circular economy. Noting that global exports of material resources per capita doubled between 1970 and 2017 and that overall global extraction of materials tripled in the same period, the report tracks trends and resource requirements of international trade over time, describing how and where material footprints have shifted and flagging that rising demand is being met by fewer exporters.

The paper finds that resource extraction and processing were responsible for 90% of species loss, 90% of water stress and 50% of greenhouse gas (GHG) emissions in 2017. In terms of the resources being extracted, the paper notes that fossil fuels and metal ores together comprised approximately 75% of global physical trade flows that year. To combat these impacts, UNEP and IRP call for a circular economic model that shifts the trajectory of natural resource demand, which is currently on track to double from current levels by 2060.

A UNEP/IRP fact sheet acknowledges international trade as capable of accelerating environmental degradation by boosting resource production and use—and shifting that production to countries that lack stringent environmental regulations—and increasing pollution linked to transportation. It highlights, however, as also noted in the report’s executive summary, that trade can facilitate access to green technologies and enable the proliferation of environmental goods and services.

A circular economic model, a UNEP news release notes, can cut GHG emissions by up to 90% while boosting growth by 8% by 2060. Calling for the World Trade Organization (WTO) to take the environment into consideration when setting regulations, the report recommends regional trade agreements as a potential means of promoting investments in the environment, eliminating fossil fuel subsidies, and reducing demand for primary raw materials, in part through harmonizing product standards that can enable circular economies at a regional scale.

Additional recommendations for policymakers include:

• enhancing alignment between international trade and environmental legal frameworks;
• aligning domestic policy in developing countries with trade agreements;
• ensuring that trade agreements move towards a circular economy that is inclusive of developing countries; and
• advancing the development of international standards for circularity.

The report specifically calls out the lack of alignment between existing trade rules and the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal as hindering the facilitation of trade and circularity.

Speaking at the report’s launch, UNEP Executive Director Inger Andersen stressed the relationship between trade, the environment, and the economy, emphasizing that “the economic fallout of COVID-19 is just an overture to what we would see if the Earth’s natural systems break down.” Andersen added that “global trade policies [must] protect the environment not only for the sake of our planet but also for the long-term health of our economies.” [Publication: Sustainable Trade in Resources: Global Material Flows, Circularity and Trade] [UNEP/IRP Fact Sheet] [Publication Landing Page] [UNEP News Release]