Meeting needs at the human scale creates opportunities for serving people across regions and internationally. 

Trade is the domain of national governments. In the European Union, it is largely treated as a supranational policy space. In the US, there is mainstream disagreement over whether Congress or the Executive branch leads in coordinating trade and tariffs, though the Constitution clearly gives this power to Congress. 

Local communities cannot set trade policy, and most nations make it unlawful to negotiate side deals with foreign nations. And yet, worsening climate disruption points to a future in which financial interests, consumer preferences, and trade policy increasingly reward products and services that align with climate risk reduction and successful climate-resilient development. 

There are ways local communities, municipal and state or provincial governments, can support climate-smart trade. First, there are local and state-level budgets and incentives. By investing to support local development of climate-smart production capacity and services, subnational governments can create conditions for their local economies to thrive in a world that favors climate-smart trade. 

Value chain approaches, considering needs of multiple stakeholders and supplying additional and more flexible credit and investment, can be supported by innovative co-investment arrangements. Such initiatives can be targeted ventures or large-scale institutions that pool funding and provide a wider base of support to sustainable practices, using science data to show non-financial returns on investment and improved future economic stability.

Services are increasingly able to operate across borders, which creates an often overlooked opportunity for local economic diversification. Climate risk reduction and resilience services can leverage Earth systems insights, sustainability metrics, and public resources committed to macrocritical resilience (security against nonlinear compounding threats), to increase value for clients around the world.

Agricultural production offers another major opportunity. With more than $15 trillion per year wasted on the hidden costs of unsustainable food system practices, climate-smart, sustainable, and resilience-building production practices can support better fiscal health and more efficient public investment in economic development.

How can this happen? First: Public authorities at the local, county, and state levels, can set voluntary standards that are rewarded with public money. If producers adopt better practices, support enhanced fiscal stability, diversify employment opportunities, and capture new investment in practices that restore and protect Nature and ecosystems, they can be rewarded with tax breaks, enhanced access to credit, lower insurance costs, and direct subsidies. 

Threats to the agricultural economy are spreading. Due to the vastness of the farm economy, which means endless market competition, agriculture has always been a low-margin, high-risk business for small-scale producers. Now, converging forces are further putting agriculture at risk and threatening food supplies. 

The impacts of climate disruption are among the most serious threats to long-term food system sustainability—reducing yields, increasing water scarcity, multiplying the risk factors for harvest failure, and cutting into margins, making it harder to sustain operations year to year. 

Procurement of climate-smart food products, produced with regenerative and agroecological practices, which restore soil ecology and protect watersheds, can allow local and regional governments to directly support farmers. This can create a foundation for capturing wider market incentives, including payments for climate and ecosystem services and profit-sharing from green finance mechanisms. 

As local and regional farmer-consumer alignment advances, opportunities for new investment, new hiring, and expanded production increase. Better practices aligned with human health and ecosystem integrity create more diverse opportunities for smaller scale local enterprise, and so a diversified landscape for hiring and investment. That creates leverage for capturing climate-smart trade opportunities, with or without national policy or targeted trade agreements.

Some of this is foreseeable, because it is becoming a mathematical necessity. Better information technology is allowing for more complex integrated calculations of active value, and that means it will be harder to avoid being graded for performance in terms of hidden costs and benefits. Multidimensional fiscal resiilence metrics are coming into view.

One of the effects of revoking the Endangerment Finding—which simply acted on the 2007 Supreme Court order to state clearly the scientific evidence of climate-related threats to human health and security—is that doing so removes one of the lawful options for adjustment of import prices through executive action. The Congress, the World Trade Organization, the European Union and other trade partners, recognize the role of carbon border adjustments as a lawful mode of economic defense.

Article 6.8 of the Paris Agreement calls for cooperative “non-market approaches“, including private sector and subnational actors in practical and leadership roles. In other words, 196 nations have already agreed that non-governmental and subnational actors have a role to play in shaping the landscape of opportunity for climate-smart trade and finance.

There is a tension in mainstream economics between large-scale financial institutions and local commercial enterprise attuned to real incomes and affordability. Local governments can support a transition to diversified local economic opportunity by incentivizing greater transparency, capability, and sustainability, for small and medium-sized local and regional financial institutions. 

Resource efficiency expands the opportunity for breakthroughs driven by alignment of local creative thinking and impact-focused investment. This can mean reducing food loss and waste, localizing clean energy production, enhancing the adaptability of buildings and infrastrucutre, or designing new products that alter the calculus for competitive capital allocation. 

3D printing technologies allow manufacturing innovation to start at small scale, to serve local needs, and to support capital-efficient innovation attuned to problems at scale. Incubator initiatives create opportunities for local public spending and impact investment to support development of new materials and business strategies that reduce carbon emissions and support enhanced sustainability and economic inclusion. 

Referring back to food systems:

• The ‘farm-to-fork’ value chain requires flexible support for first and last-mile needs, and for infrastructure sufficient to reduce waste and optimize profitability and affordability.
• Filling in these needs locally and regionally makes it more affordable to produce at scale and direct some farm produce to international markets. 
• Local and regional governments can support the export-oriented investments needed to first establish local operational integrity and then expand production, distribution, and investment opportunity.
• Those jurisdictions that favor high-resolution Earth systems insights being used to reward sustainable production will attract new resilience-focused capital.

Incubation and financing projects aimed at supporting local small businesses, sustainability-focused start-ups, and innovative institutions like soil ecology finance and data services companies, can create unique ecosystems of competitive innovation and rapid scaling. There is no question that climate-smart trade will eventually become the norm; the question is which places will be held back by outdated thinking or counterproductive policy.