Green Industrial Policies are Critical for Developing Countries to Adapt to Climate Change

According to the UN trade and development body (UNCTAD), green industrial policies will be important for developing nations to adapt to climate change. 

Many developing nations, according to UNCTAD, are locked in an “eco-development trap,” in which economic and climate shocks compound each other, resulting in constant disruption, economic uncertainty, and weak productivity growth. 

Adequate adaptation to the climate crisis will necessitate a new approach that is proactive and deliberate rather than reactive. However, governments in developing countries require sufficient policy and fiscal space to mobilize large-scale public investment in response to future climate challenges, while also ensuring that these investments support development goals. 

Despite the fact that climate adaptation is regarded as a “poor cousin” to mitigation, the UN agency claims that this is both shortsighted and costly for poorer nations, where climatic shocks have harmed growth prospects and pushed governments to reallocate precious resources. 

Adaptation costs for developing countries have more than doubled in the last decade as a result of the delay, and are expected to continue to rise as temperatures rise, reaching $300 billion in 2030 and $500 billion in 2050. 

Although governments have been urged to improve data collection and risk assessment procedures in order to build climate resilience,  adaptation is less a matter of risk management and more a matter of development planning with the state playing a vital role. 

Climate adaptation and development are intricately linked, and policy initiatives to address adaptation must take this into account if they are to have a long-term and meaningful impact. 

As a result, the only long-term answer is to build more robust economies through structural reform and lessen developing nations’ reliance on a small number of climate-sensitive activities. Green industrial policies that take into account local economic circumstances might be “retrofitted” into development. 

Renewable energy generation, for example, can be done on a small scale, allowing small businesses and rural communities to benefit. 

This would assist to diversify overall economic production, reduce reliance on primary commodities, and even broaden the tax base, allowing for the creation of new domestic sources of development finance. 

To avoid falling into the eco-development trap, the report suggests that developing countries adopt key features like abandoning austerity as the default policy framework, large-scale public investment in renewable energy and green technologies, and a green agricultural policy that protects small farmers and the environment.