Green industrial policies will be critical for developing countries to adapt to climate change, UN trade and development
body UNCTAD said in a report published on Thursday.
The agency has called for a “transformative approach” that will allow these nations to address current and future
climate threats while also driving growth and job creation.The ‘eco-development trap’
UNCTAD said many developing countries are caught in an “eco-development trap” as vulnerability to economic and climate shocks
are compounding each other, resulting in permanent disruption, economic uncertainty and slow productivity growth.
“The report demonstrates that sufficient action to adapt to the climate challenge will require a transformed approach
that is proactive and strategic rather than simply retroactive,” said Rebeca Grynspan, the UNCTAD Secretary-General.
“But developing country governments need adequate policy and fiscal space to mobilize large-scale public investment to
face future climate threats, while ensuring these investments complement development goals.”
The study is the second part to UNCTAD’s annual Trade and Development Report, which was released in September.Adaptation costs rising
Although climate adaptation is viewed as a kind of “poor cousin” to mitigation, the UN agency said, this is both
shortsighted and costly for developing countries, where climate shocks have damaged growth prospects and forced
governments to reallocate scarce resources.
Adaptation costs for developing countries doubled over the past decade due to inaction, and are set to rise further as
temperatures increase, reaching $300 billion in 2030 and $500 billion in 2050.
Although countries have been advised to strengthen climate resilience by improving data gathering and risk assessment
techniques, the report argues that “adaptation is less a matter of risk management and more one of development
planning”, with the state playing a key role.Sustainable and meaningful impact
“Climate adaptation and development are inextricably connected and policy efforts to tackle adaptation must acknowledge
this, in order to have a sustainable and meaningful impact,” said Richard Kozul-Wright, director of UNCTAD’s
globalization and development strategies division, and lead author of the report.
He suggested that the only lasting solution, therefore, “is to establish more resilient economies through a process of
structural transformation and reduce the dependence of developing countries on a small number of climate-sensitive
activities.”
The report proposes that development can be “retrofitted” to implement green industrial policies which take local
economic circumstances into consideration.
Renewable energy production, for example, can operate at a low scale, thus opening business opportunities for small
firms and rural areas.
This would help to diversity economic production overall, reduce dependency on prime commodities, and even enlarge the
tax base, helping create new domestic sources of development finance.
To escape the eco-development trap, the report recommends that climate adaptation in developing countries should include
key features such as “abandoning austerity as the default policy framework”, large-scale public investment in renewable
energy and green technologies, and adopting a green agricultural policy that protects small producers and the
environment.