Trade, Development, and the Climate Crisis Unpacking the Climate-Economy Nexus

Abstract : Globally, countries have implemented several programmes to achieve speedy economic development. This is not only to improve the standard of living but also to address the insatiable needs of the growing population, given the limited resources. The inputs given to achieve this goal are human capital investment, technological innovation, and liberal economic policies, which have driven rapid industrialisation and trade, especially among populous Asian economies. This growth, however, has come with a heavy environmental cost. The interconnected global economy, through mechanisms like FDI, FII, and international trade, has accelerated greenhouse gas emissions, half of which are trade-related and predominantly contributed by a handful of industrialised and emerging economies. Climate change, once a peripheral concern, has now become a central theme in economic treatises. This study explores the intricate nexus between economic growth, trade, and environmental degradation. It assesses how climate distortions are manifesting as heatwaves, rising sea levels, floods, cyclones, disrupting global economic activities, and deepening vulnerabilities, particularly in developing nations. It is attempted by using historical examples and contemporary climate data. This paper attempts to analyse the uneven distribution of climateinduced risks, revealing how countries that are least responsible for emissions often suffer the most devastating consequences. The study also advocates for a rethinking of growth models to balance economic aspirations with environmental sustainability