UNCTAD: Green industrial policies key for developing countries to adapt to climate change

The second part of UNCTADs Trade and Devlopment Report 2021 released on 28 October calls for a transformative approach to climate adaptation, with large-scale public investment programmes to adapt to future as well as current threats, and green industrial policies to drive growth and job creation.

2021 has been another year of extreme climate events; more intense heatwaves, increasingly powerful tropical cyclones, prolonged droughts and higher sea levels are unavoidable, with rising global temperatures bringing with them ever greater economic damage and human suffering.

In many developing countries vulnerability to economic and climate shocks are compounding each other, locking countries into an eco-development trap of permanent disruption, economic precarity and slow productivity growth. The greater the rise in global temperatures, the greater the damage to countries in the South (see the figure below).

Breaking out of the eco-development trap implies that the climate adaptation challenge in the developing world needs to be approached from a developmental perspective, including the following key features:

• Abandoning austerity as the default policy framework to manage aggregate demand and switching to pro-investment policies.
• Large-scale public investment in building a diversified low-carbon economy, powered by renewable energy sources and green technologies, and where economic activities within and across sectors are interconnected through resource-efficient linkages.
• Adopting a green industrial policy that proactively identifies the areas where the most significant constraints to climate adaptation investment are; channelling public and private investment to these activities; and monitoring whether these investments are managed in such a way as to sustain decent employment and to increase long-term climate security and productivity.
• Adopting a green agricultural policy that protects small producers, provides backward and forward linkages to green industrialization, protects the environment and enhances food security through increased agricultural productivity and income security.
• Using renewable energy production and the circular economy to diversify and reduce dependence on primary commodities. Renewable energy production can economically operate at a low scale, opening business opportunities for small firms and rural areas.

You can read the report here: UNCTAD Report

Source: UNCTAD