In the Asia-Pacific region, clean energy, energy efficiency, engineering, manufacturing and construction industries could create about 1 million new jobs, downscaling the industry and compensating for an estimated five million jobs.
Monday Asia-Pacific Trade and Investment Report 2021 jointly by 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 Program (UNEP).
Climate-smart policies have a significant cost, especially for the carbon-intensive sector and economy, but the cost of inactivity is much higher. Some estimates are more than 2 792 trillion by 2100, if the goals of the Paris Agreement are not met.
Risk and competition
At the launch of the report, ESCAP Executive Secretary Armida Salsia Aliszahban noted that major trading partners are considering border taxes on carbon.
Ms Alisjahabana said this “raises serious concerns about the impact on developing countries as many economies in the region are at risk of exiting the main market”.
For that, launching Covid-1 recovery recovery packages could provide investment opportunities in low-carbon technologies and sectors.
Room for improvement
The Asia-Pacific region is currently the largest emitter of greenhouse gases, but new reports highlight significant areas for greening these economies.
For example, there are more barriers to trading in environmental products than carbon-intensive fossil fuels, and fuel subsidies exist.
According to the report, the “timely abolition” of these two policies and their replacement with more targeted measures could provide much-needed funding and reduce emissions.
Other proposals include liberalizing trade in climate smart and other environmental products, transforming it into climate-friendly transportation, including climate issues in trade agreements, and adjusting carbon prices and carbon boundaries.
For Bangladesh’s Commerce Minister Tipu Munshi, Hon’ble, these measures are “very appropriate considering the crises we are facing”.
Positive and negative effects
In a joint statement, New Zealand’s Minister for Trade and Export Growth, Damien O’Connor, and Climate Change Minister, James Shaw, said “one of the main obstacles to reducing emissions is the reduction of fossil fuels.”
Rebecca Greenspan, head of UNCTAD, described the “relationship between trade, investment and climate change as complex.”
He explained that “the key to ensuring maximum positive effects of trade and investment is to improve trade and investment in renewable energy and low carbon technologies, while minimizing adverse effects such as digitizing trade and transportation systems”.
According to the report, regional trade agreements may also help and these changes are starting to happen. The report points to a general trend towards more environmental provisions in this agreement.
The Asia-Pacific Trade and Investment Report 2021 examines the impact of the upcoming border carbon adjustment in the region.
This is the first time an indicator assesses climate-smart trade and investment policy.