As the global economy transitions towards more sustainable practices, new measures to green production and trade aimed at promoting environmental responsibility are emerging.  While positive in principle, these measures risk inadvertently disadvantaging the world's most vulnerable nations – the Least Developed Countries (LDCs).

This working paper examines the potential for a “green squeeze”, providing a crucial analysis of the impact of emerging green production and trade measures on these nations. Despite contributing minimally to global emissions, LDCs are disproportionately vulnerable to climate change impacts and economic shocks. 

The report focuses on the European Union as a case study, analysing the potential effects of three key EU policies – the Carbon Border Adjustment Mechanism (CBAM), the Deforestation Regulation (EUDR) and the Corporate Sustainability Due Diligence Directive (CSDDD). It highlights the varying degrees of exposure and vulnerability across different LDCs, underscoring the urgent need for more joined-up thinking and action across the climate-trade-development nexus.

Report by the Overseas Development Institute