This sectoral briefing note focuses on the energy transition, outlining climate action and impact scenarios in the transition away from fossil fuels while examining trade-related trends and dynamics. The paper identifies trade policy solutions to drive the energy transition, including in relation to market access, technical standards, fossil fuel subsidy reform, border carbon adjustments, and investment treaties, as well as key opportunities and challenges for developing countries. The paper concludes with a set of priorities for an equitable energy transition, noting that developing countries must play a central role in shaping the future of clean energy trade.

This briefing note and the series will help contribute to a better understanding of emerging trade and trade policy trends and dynamics and their implications within the various sectors, thereby supporting developing countries in identifying and advancing their climate and trade-related interests and priorities in international discussions.

The briefing notes in the series—covering sectors ranging from agriculture to carbon markets, critical minerals, digital trade, energy, fisheries, heavy industries, renewable energy, shipping, and textiles—will inform a final report to be released in the coming months.

This briefing note was produced in collaboration with E3G, recognizing the value of joint efforts in addressing the complex challenges and opportunities that climate and trade policies present for developing countries. Together, we aim to strengthen the global response to climate change by ensuring that developing countries can successfully navigate the transition to a sustainable, low-carbon future.

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Recommended citation: Walker, B. & Belton, E. (2025). Energy Transition – Trade, climate, and net zero pathways: Scenarios and implications for developing countries and climate-resilient development. Forum on Trade, Environment, & the SDGs (TESS) and E3G.