Global Trade and the Coming Climate Disruption

Ha Le, a second-year MBA student at Maryland Smith, writes about the Center for Global Business Annual Forum.

On Monday, April 20, 2020, the Center for Global Business (CGB) hosted its second Annual Forum, a signature spring event that brings together distinguished voices from the academic, policy, diplomatic, and business communities on issues that impact international business. The center welcomed four experts to offer insights on the topic of Global Trade and the Coming Climate Disruption. The conversation focused on what we currently know about climate science as a global community, the relationship between global trade and climate change, and how this relationship will impact industry and the environment. Kislaya Prasad, CGB’s academic director, led the discussion with Paul Brenton of the World Bank, Alice Hill of the Council on Foreign Relations, and Robert Orr, dean of the School of Public Policy at the University of Maryland, United Nations under-secretary-general and special advisor to the UN secretary-general on climate change.

“The political consensus has been for some time that we are on a path towards catastrophic climate change. The agreed goal for the global community is to reduce emissions such that we can keep the global mean temperature to no more than two degrees warmer than pre-industrial levels. How are we doing on that? Not so well”, said Orr on the urgency of climate change.

He shared several effects caused by climate change. Experts predict that between 25 million and one billion people will be living as environmental refugees by 2050. Days with more extreme heat continue to negatively impact lives and livelihood alike. Rising sea levels will endanger hundreds, millions, and potentially billions of people.

“You don’t have to look far to find examples of climate disasters. In fact, they are here in the United States,” echoed Hill on the impact of climate change. Extreme events have also caused billions of dollars in losses for global businesses.

“[The urgency to cut emissions] is the most resilient strategy we have, but it’s also very urgent that we take steps to prepare ourselves. Now, as the COVID-19 has shown, if we don’t prepare, it makes things far worse,” she continued. Hill is the co-author of a new book, Building a Resilient Tomorrow: How to Prepare for the Coming Climate Disruption.

Speaking about the relationship between trade and climate change, Breton said, “Overall, trade has increased level carbon emissions… [And], yes, climate change has a fundamental effect on trade, because it affects the comparative advantage that countries have. Agricultural productivity is going to be struck by rising temperatures and changing precipitation. Extreme weather affects the infrastructure that’s necessary for trade routes and ports.”

In response to the question of whether the goals of fighting climate change and fighting global poverty are in opposition to one another, Orr emphasized, “the fight against climate change is one of the biggest poverty reduction tools out there and vice versa. The attempt to reduce poverty does not automatically mean increased climate change.”

Brenton believes trade, in some ways, can be part of the solution to climate change. “We do need to coordinate climate change and trade policies. I think the first step that we can take quickly is to remove trade policies that distort toward emission-intensive products. Many developing countries will be low emission sources of production through the improvement of more efficient technologies that are again conducive to trade and development. The cooperative solutions are superior to countries pursuing solutions on their own.”

The annual forum this year was the first event organized by the center that was made available entirely through a virtual platform due to COVID-19 precautions. While outside of the norm, the center leveraged the opportunity and was able to reach participants from across the country and around the world.

This event was supported in part by CIBE, a Title VI grant provided by the U.S. Department of Education.