Financial and export diversification is the very best response to the challenges posed by local weather change in creating international locations that rely upon commodities, based on UNCTAD’s Commodities and Improvement Report 2019.
The diversification might be horizontal, which entails venturing into new items and sectors to cut back dependence on a slim vary of commodities, or vertical, which entails shifting the worth chain of a commodity as much as enhance its value, says the report, Commodity Dependence, Local weather Change and the Paris Settlement.
Though commodity-dependent creating international locations contribute solely modestly to local weather change, the local weather disaster places them at most threat. They’re extra susceptible primarily as a result of they’re economically depending on sectors which can be extremely uncovered to excessive climate occasions, the report states. Small island creating states (SIDS) are among the many worst affected.
“The local weather disaster poses an existential menace to commodity-dependent creating international locations and can end result within the collapse of some economies if decisive motion isn’t taken now,” UNCTAD Secretary-Normal Mukhisa Kituyi stated.
The unfavorable results of local weather change on crop and fisheries manufacturing are extra extreme in low-latitude areas, the place most commodity-dependent creating international locations are situated, the report notes. Equally in danger are high-income, fossil-fuel-dependent international locations, similar to Brunei Darussalam, Kuwait and Qatar, which have a number of the highest ranges of greenhouse gasoline emissions per capita. They might be profoundly affected by the stranding of their main pure useful resource on account of the rising push in direction of greener sources of power, the report says.
It notes that the worldwide push in direction of renewable power and power effectivity creates alternatives in international locations with massive reserves of supplies utilized in clear applied sciences, similar to photo voltaic photovoltaic cells, wind generators and electrical automobile batteries. For instance, in 2018 the Democratic Republic of the Congo accounted for 58 % of the worldwide provide of cobalt, a key commodity used within the manufacturing of electrical automobile batteries, whereas Chile and Argentina collectively accounted for 71 % of world reserves of lithium, one other key part within the manufacture of batteries.
Preventing local weather change might additionally create alternatives to spice up manufacturing of options to cattle meat and milk, the report says. It factors out the case of livestock in some drylands in Africa, the place elevated drought frequency and declining feed availability have inspired pastoralists to undertake camels to complement or exchange cattle.
The report echoes warnings from specialists that commitments made by international locations to mitigate local weather change beneath the Paris Settlement aren’t formidable sufficient. The commitments must quadruple to restrict international temperature rise to 1.5°C above pre-industrial ranges, the report notes. It underlines that climate-related funding, which is at present solely a fraction of precise necessities, must be considerably scaled up given the excessive value of local weather change mitigation and adaptation.
For instance, the entire value of implementation of local weather motion plans for 80 creating international locations which have specified their financing wants is estimated at $5.four trillion, the report notes. That is the order of magnitude of the entire quantity spent on power subsidies yearly on this planet.
As well as, the report states that greening fiscal insurance policies will help to make sure taxes, subsidies and comparable coverage devices contribute to the implementation of local weather motion plans and the achievement of the sustainable growth targets. It suggests reforming fossil gasoline subsidies to additional inexperienced fiscal insurance policies. It’s estimated that the wealthiest 20 % of households in creating international locations obtain 43 % of the advantages from fossil gasoline subsidies, whereas the poorest 20 % get solely seven %.
The report is on the market here.