This article is part of a Synergies series on African trade and sustainability priorities and interests. Any views and opinions expressed are those of the author(s) and do not necessarily reflect those of TESS or any of its partner organizations or funders.

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The relationship between trade and climate change has become one of the defining geopolitical and economic questions of the 21st century. What was once treated primarily as an environmental concern now sits at the centre of debates on industrial policy, energy transitions, investment governance, technological competition, and the legitimacy of the multilateral trading system. For Africa, this intersection is neither abstract nor peripheral. It is deeply material, profoundly political, and increasingly existential.

Africa stands at a historic crossroads. The continent is amongst the most vulnerable to climate shocks despite contributing the least to cumulative global greenhouse gas emissions. Droughts, floods, desertification, biodiversity loss, and food insecurity are already undermining livelihoods, disrupting trade flows, and placing immense pressure on fragile development gains. At the same time, Africa has become strategically central to the global green transition owing to its vast reserves of critical minerals, significant renewable energy potential, and youthful labour force. The continent once positioned at the margins of industrial capitalism now occupies a central place in the emerging architecture of low-carbon production.

Yet this strategic importance conceals a deeper contradiction. The emerging green economy risks reproducing the same structural inequalities that have historically constrained Africa’s development. While the language has shifted from fossil fuels to decarbonization, from extraction to sustainability, and from globalization to resilience, the underlying structures of unequal exchange remain largely intact. There is a growing danger that Africa will once again be confined to the role of supplier of raw materials, while value addition, technological innovation, intellectual property ownership, and high-value manufacturing remain concentrated elsewhere.

This is the central tension shaping contemporary debates on trade and sustainability: will climate governance facilitate structural transformation in Africa, or will it merely repackage older hierarchies within a new regulatory vocabulary?

In recent years, major economies have revived industrial policy with notable force. The United States, the European Union, and other advanced economies are deploying subsidies, strategic investment instruments, carbon regulations, and supply chain controls to secure green transitions and geopolitical resilience. Instruments such as carbon border adjustment mechanisms, deforestation-linked import restrictions, and sustainability due diligence frameworks reflect a decisive shift away from earlier neoliberal assumptions that discouraged state intervention.

However, this resurgence of industrial policy is uneven. Developing countries were historically discouraged from deploying similar tools such as subsidies, local content requirements, and export taxes on the grounds that they distort markets. Today, the same instruments are widely used by advanced economies to protect strategic industries and accelerate decarbonization. This asymmetry exposes a profound credibility gap within the global trading system: the rules historically imposed upon developing countries differ markedly from the practices now embraced by developed economies.

Africa cannot afford to remain passive in this transition debate. The continent’s challenge is not merely to participate in green value chains, but to shape them in ways that enable industrialization, economic diversification, and technological upgrading. Trade policy, climate policy, and industrial policy can no longer be approached in a silo manner; they now constitute an integrated domain of economic sovereignty and developmental agency.

Climate-related trade measures illustrate this tension clearly. While environmental governance is necessary to address the climate crisis, many emerging instruments also function as market-access conditions. Carbon adjustment mechanisms, supply-chain due diligence regimes, and sustainability standards may pursue legitimate environmental objectives, yet they also redistribute adjustment costs and reshape comparative advantage across the global economy.

For African countries, the concern is not the principle of environmental regulation, but the manner in which such measures are designed and implemented. When rules are developed unilaterally and imposed without early consultation, developing countries are compelled to adapt ex post rather than participate in shaping outcomes ex ante. This raises not only substantive concerns, but also procedural questions of fairness and inclusion.

African policymakers therefore must emphasize the importance of early-stage consultation, transparency, and structured dialogue in the formulation of climate-related trade measures. Without such mechanisms, sustainability governance risks becoming a form of exclusion rather than cooperation. For exporters, particularly smallholder farmers, micro, small, and medium-sized enterprises (MSMEs), and emerging manufacturers, compliance with complex traceability and carbon-accounting requirements can be both costly and technically burdensome in the absence of adequate support.

This is not opposition to sustainability. African economies are amongst the strongest advocates for climate action precisely because they experience its impacts most acutely. The concern is that environmental standards are increasingly externalized through regulatory frameworks that insufficiently account for varying levels of development, institutional capacity, and historical responsibility.

Without flexibility, transitional support, and technical assistance, such measures risk excluding vulnerable producers from global markets while reinforcing the market power of large multinational firms capable of absorbing compliance costs. Sustainability, in its current form could thus inadvertently reinforce concentration rather than inclusion.

This is why the principle of common but differentiated responsibilities remains indispensable in trade and climate governance. Climate justice cannot be divorced from historical responsibility, unequal development trajectories, and asymmetries in productive capacity. Expecting identical obligations across vastly different economies risks undermining both equity and effectiveness.

For Africa, the question of policy space is therefore central. Industrialization and climate resilience are not competing objectives; they are mutually reinforcing imperatives. Achieving both requires the ability to deploy targeted subsidies, infant industry protection, local content policies, strategic procurement, and regional value chain development. Without these instruments, Africa risks remaining locked into commodity dependence.

The fragmentation of the global trading system further complicates this landscape. Geopolitical rivalry, subsidy races, and unilateral trade measures are weakening the multilateral framework that once provided predictability and stability. The World Trade Organization (WTO), whilst still important, now faces increasing questions regarding its relevance and capacity to manage emerging trade–climate tensions.

In this fragmented global economy, smaller economies are particularly vulnerable to marginalization. Decision-making is increasingly shifting towards bilateral and plurilateral arrangements dominated by major powers. This trend risks excluding African voices at precisely the moment when global rules governing green industrialization are being rewritten.

A development-centred reform of the multilateral system is therefore essential. Sustainability must not become a mechanism through which industrial policy space is preserved for advanced economies while constrained for developing countries. Instead, trade rules must explicitly support structural transformation, diversification, and inclusive development.

On the other hand, regional integration offers one of the most significant opportunities for Africa to strengthen its position. The African Continental Free Trade Area (AfCFTA) provides a framework for expanding intra-African trade, building regional value chains, and reducing dependence on raw commodity exports. If effectively implemented, it could serve as a platform for regional industrial coordination and green economic transformation.

However, this potential is not automatic. Persistent infrastructure gaps, energy constraints, fragmented regulatory systems, and limited productive capacities continue to undermine competitiveness. More importantly, there remains insufficient alignment between trade policy, climate commitments, and industrial development strategies. National development plans, nationally determined contributions, and AfCFTA implementation frameworks must increasingly be treated as interconnected pillars of a broader structural transformation agenda.

Africa’s role in the global energy transition must also be governed by principles of equity and economic sovereignty. The global rush for critical minerals must not become a twenty-first-century iteration of extractive colonialism justified in the language of decarbonization. Responsible mining, environmental stewardship, local community participation, and domestic value addition are not peripheral concerns; they are central conditions for a just transition.

At the same time, the rise of market-based climate mechanisms risks commodifying African ecosystems without adequately safeguarding local livelihoods and land rights. Carbon offset schemes, large-scale land acquisitions, and speculative green investments can generate new forms of dispossession where governance frameworks are weak. Climate action cannot be pursued through models that externalize environmental costs while concentrating economic gains elsewhere.

In essence, the relationship between trade and climate change is not merely about reconciling economic growth with environmental protection. It is fundamentally about power, development, and the future organization of the global economy. The transition to sustainability will inevitably produce winners and losers. The critical political question will largely depend on whether the multilateral trading system will accommodate this reality.

The future legitimacy of the multilateral trading system will depend significantly on its ability to accommodate this reality. A truly inclusive global trade regime must recognize that sustainability and development are not competing objectives for Africa; they are mutually interdependent. Climate action that undermines industrialization, constrains policy autonomy, or entrenches commodity dependence cannot deliver genuine sustainability. Nor can global decarbonization succeed if entire regions remain structurally marginalized from green industrial development.

Africa’s demand for policy space is therefore not a rejection of sustainability. It is a demand for a just and development-oriented transition. The continent is not seeking exemption from climate responsibility; rather, it is insisting that the global green economy must not replicate historical patterns of extraction, exclusion, and unequal exchange under a more environmentally conscious vocabulary.

As debates on WTO reform, green industrial policy, and climate-related trade governance intensify, Africa has an opportunity to reshape the global conversation fundamentally. The objective should not be limited to improved market access, but the transformation of Africa’s position within the global economy. This requires moving beyond a narrow trade paradigm focused on compliance and export dependence towards a broader vision grounded in industrial sovereignty, regional integration, technological capability, and social justice.

The green transition will only be truly sustainable if it is also equitable. Anything less risks reproducing historical inequalities beneath the rhetoric of climate ambition.

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Jane Seruwagi Nalunga is Executive Director, Southern and Eastern Africa Trade Information and Negotiations Institute (SEATINI) Uganda.

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Synergies is an online platform featuring expert commentary and opinions curated by TESS. We foster dialogue and incubate ideas on how to shape a global trading system that effectively addresses global environmental crises and advances sustainable development. Synergies draws on perspectives from leading experts and practitioners across policy communities from around the world. We cultivate solutions-oriented policy analysis for a sustainable future.

The Executive Editor is Fabrice Lehmann.

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