This November, the United Kingdom will host the 26th UN Climate Change Conference (COP26) in Glasgow, from October 31 to November 12, 2021. As part of its preparations, the UK Parliament International Trade Committee recently launched an inquiry on COP26 and international trade. The Committee will be accepting submissions until September 7, 2021 on the series of questions that make up its call for evidence. One of those questions asks,
What discussions, if any, are planned to develop a multilateral approach to carbon pricing systems (including border adjustment mechanisms), green subsidies and investment funds, the curbing of fossil fuel subsidies, a circular economy and sustainable supply chains?
A multilateral approach on most of these issues seems very unlikely, notably border adjustment mechanisms. As discussed in a previous post, the European Union is pursuing its Carbon Border Adjustment Mechanism unilaterally. The United States and others may follow suit. This post explores the possibility of reaching a multilateral agreement on curbing fossil fuel subsidies, which could have serious implications for producers and downstream purchasers.