Outsourced emissions are a major loophole in current efforts to tackle climate change and build a green economy. International flows of carbon embedded in trade have grown considerably since the 1992 Rio summit, with developed northern nations benefiting unjustly from effectively outsourcing pollution to developing southern states. The world needs to agree to the principle of Clean Trade Agreements. These arrangements, negotiated between states and regions, would come to replace Free Trade Areas and build mutually-agreed carbon constraints into the terms of trade. Clean Trade Agreements would aim to halt the ‘race to the bottom’ witnessed as globalisation has unfolded – where industry invariably migrates to regions with the least stringent environmental regulations – and reverse the growth in outsourced emissions.
