Reproducibility package for Climate Policies And Their Impact On Developing Countries’ Trade

Developing countries are navigating a rapidly evolving climate policy environment that can significantly impact their trade flows. Climate policies, primarily led by developed nations, aim to mitigate climate change by promoting low-carbon products ad energy efficiency, favoring firms that adopt greener production processes. This shift increases demand for green technologies and critical materials, while reducing opportunities for less carbon-competitive firms. The report explores the complex interactions between climate change, trade competitiveness, and climate mitigation policies. It provides scenarios modeling the impacts on trade under different levels of global climate mitigation efforts and analyzes trade exposure to selected climate policies of the European Union, United States, and China. It aims to guide developing countries in prioritizing climate and trade-related reforms, supporting sectors with potential for expansion, and addressing challenges in sectors with declining demand. The adjustment to a new policy environment is facilitated by a reduction of barriers to trade in environmental goods and services, developing quality infrastructure for compliance with more stringent environmental regulations, innovation, technological transfers, and climate finance.