Asia and the Pacific is on the front line of climate change, with high exposure to extreme weather, and many people living in low-lying coastal areas. Almost 40% of disasters worldwide have occurred in Asia and the Pacific. With its rapid expansion of production capacity, Asia has become the major producer and exporter, serving growing global demand. Asia is also a net exporter of carbon dioxide emissions. The region's rapid economic growth and industrialization has increased CO2 emissions, despite the carbon-reducing effects of technological advancements. The region needs to embrace climate smart policies to ensure trade and investment can be part of the climate solutions. Policymakers can focus on four pillars, promoting trade and environmental goods and services, nurturing green businesses, enhancing international cooperation on regulations, and developing carbon pricing mechanisms. Environmental goods and services such as solar panels, wind turbines, and wastewater technologies can help use resources more efficiently and reduce environmental impacts. International and regional cooperation is essential for the development of a green and sustainable trading system. It's crucial to ensure that certification systems are interoperable and that regulations are coherent. It's also important to strengthen collaboration on a green economy through trade agreements, investment treaties, and other initiatives. While considering border carbon adjustments mechanisms, governments must carefully calibrate the impacts. Economies in the region need to be prepared for a changing trade environment. Ultimately, the most efficient measure for reducing carbon emissions and carbon leakages across borders is to foster international carbon markets. To discover more, read the latest Asian Economic Integration Report.