Academic experts are raising urgent alarms that escalating international trade disputes are creating a dangerous divergence between climate ambitions and global commerce, potentially derailing environmental progress worldwide. This warning emerges alongside remarkable growth in the environmental goods sector, which reached $2 trillion in exports during 2024, accounting for 14% of globally manufactured goods according to UN Trade and Development data.
Between 2013 and 2022, trade in solar energy products surged by 56% while wind generation goods expanded by 39%, significantly outpacing the 23% growth rate of overall industrial goods. However, this rapid expansion has triggered policy conflicts centered on carbon offset mechanisms, green subsidies, and environmental regulations. Major economies are increasingly implementing unilateral measures that scholars characterize as protectionism disguised as climate action.
The United States’ Inflation Reduction Act, featuring substantial subsidies for domestic clean energy production, has prompted formal World Trade Organization disputes from the European Union and other nations alleging unfair competition. Simultaneously, the EU’s Carbon Border Adjustment Mechanism continues facing resistance from developing economies, with organizations like India’s Centre for Science and Environment warning that the policy effectively shifts decarbonization costs onto emerging markets.
Additional friction points include Western targeting of China’s green technology sectors, particularly electric vehicles and renewable energy equipment, based on allegations of unfair subsidies. The EU commenced imposing tariffs on Chinese EVs in late 2024, a move that academics argue misrepresents China’s industrial development model.
Professor Sun Yixian of the University of Bath’s International Development Department explains that many cited subsidies actually represent government-funded research and development within a coherent industrial policy framework. “Many Western countries are now learning from this model, which has created a virtuous cycle supporting green industrial development,” Sun noted, adding that subsidy allegations often serve as leverage in trade disputes.
Professor Zhongxiang Zhang of Tianjin University described the EU’s anti-subsidy tariffs as a preemptive strategy against China’s competitive advantage rather than addressing proven damages. He observed that China’s EV sector advancement has disrupted the longstanding technological dominance of developed nations, prompting defensive measures to buy transition time.
These tensions dominated discussions at COP30, resulting in the Global Mutirao decision explicitly advocating for enhanced dialogue between trade and climate interests. The agreement reaffirmed that climate measures should not constitute arbitrary discrimination or disguised trade restrictions.
A significant institutional development emerged with Brazil launching the Integrated Forum on Climate Change and Trade, creating an independent platform to bridge climate and trade discussions outside existing WTO and UNFCCC frameworks. Professor Zhang Jian of Tsinghua University hailed this as the first formal dialogue mechanism addressing unilateral measures within the UNFCCC framework.
Researchers emphasize that successful green transition depends on open, stable international cooperation. Overreliance on unilateral measures risks triggering trade frictions, increasing transition costs, weakening investor confidence, and ultimately impairing global emissions reduction efficiency. Associate Research Fellow Dong Yifan of Beijing Language and Culture University stressed that current transition pace remains insufficient against climate challenges, fundamentally representing issues of cost distribution and political will requiring global cooperation.
Experts conclude that resolving these tensions demands refocusing discussions on carbon reduction fundamentals, establishing robust rules-based frameworks, and pursuing mutually beneficial solutions rather than raising trade barriers that threaten collective climate goals.