According to a new United Nations research, economies in the Asia-Pacific region must reduce greenhouse gas emissions urgently, including maintaining their trade competitiveness as carbon taxes at borders threaten to rise.
In the Asia-Pacific area, some 16 million new employment might be produced in renewable energy, energy efficiency, engineering, manufacturing, and construction, more than making up for the predicted loss of five million jobs due to downscaling industries.
The United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), the United Nations Conference on Trade and Development (UNCTAD), and the United Nations Environment Programme together launched the Asia-Pacific Trade and Investment Report 2021 on Monday (UNEP).
Climate-smart policies are expensive, especially for carbon-intensive industries and economies, but the penalty of inaction is much higher. If the Paris Agreement targets are not met, some estimates put the cost of climate change at $792 trillion by 2100.
Armida Salsiah Alisjahbana, ESCAP’s Executive Secretary, said at the report’s launch that important trade partners are exploring carbon border taxes.
COVID-19 recovery packages, she believes, will create possibilities to invest in low-carbon technology and sectors.
The Asia-Pacific area is currently the highest producer of greenhouse emissions, but the new analysis shows that there is still a lot of room for these economies to become more environmentally friendly.
For example, trade barriers to environmental goods remain higher than those to carbon-intensive fossil fuels, and fuel subsidies continue to exist.
The “timely abolition” of these two policies, according to the research, and their replacement with more focused measures might generate much-needed funding and reduce emissions.
Trade liberalization in climate-smart and other environmental commodities, the transition to climate-friendly transportation, the inclusion of climate issues in trade agreements, carbon pricing, and carbon border adjustment taxes are among the other ideas.
These restrictions, according to Bangladesh Commerce Minister Tipu Munshi, Honourable, “are very much befitting given the crises” the country is witnessing.
Regional trade agreements, according to the research, can also help, and this shift is already underway. According to the research, there is a general trend in these agreements to include additional environmental provisions.
The Asia-Pacific Trade and Investment Report 2021 is the first to look at the impact of the region’s planned border carbon adjustment.
It’s also the first time an index has been created that assesses climate-friendly trade and investment policies.