Several of the developing countries may miss out on the benefits of “green tech” revolution unless governments and the international community take decisive action now, warned UN Conference on Trade and Development (UNCTAD).
“Now is the time for developing countries to capture more of the value being created in this green tech revolution – and use it to grow their economies, make them more resilient to shocks and reduce inequalities,” said UNCTAD in its latest report Technology and Innovation Report 2023.
The UNCTAD report calls on the governments and business communities to invest in more complex and greener sectors, boost technical skills and scale up investments in the technology infrastructure needed to grow green industries. And to support this evolution, the report urges the international community to make global trade rules more supportive of emerging green industries in developing economies and reform intellectual property rights to facilitate technology transfer to these countries.
“We are at the beginning of a technological revolution based on green technologies,” UNCTAD Secretary-General Rebeca Grynspan said. “This new wave of technological change will have a formidable impact on the global economy.”
The 17 frontier technologies covered in UNCTAD’s Technology and Innovation Report 2023 have the potential to create market revenues of more than $9.5 trillion by 2030, about three times the size of India’s economy today.
In the report, the UNCTAD stresses that the new wave of green technologies spans artificial intelligence to electric vehicles. It calls for coherent policy action to enable developing countries to profit from green tech or risk facing growing economic inequalities, as developed countries reap most of the benefits.
“A renewables revolution means sharing knowledge and technologies with all countries, equally. Currently, the majority of global renewable energy capacity, technology and expertise is housed within a handful of countries. As the world transitions to a net-zero, resilient and just future, we cannot allow developing countries to fall behind. A renewables revolution also means ensuring that policies and processes are in place to reduce market risk and attract investments to the renewable energy transition across developing countries. Together with international financial institutions and the private sector, developed countries must level the playing field to fast-track renewable energy projects in developing countries,” said UN Secretary General Antonio Guterres.
“Developing countries must capture more of the value being created in this technological revolution to grow their economies,” Grynspan said. “Missing this technological wave because of insufficient policy attention or lack of targeted investment in building capacities would have long-lasting negative implications.”
EARLY ADOPTERS ADVANCE FASTER
The report is built around the concept of green innovation – creating or introducing new or improved goods and services that leave lighter carbon footprints and open up green windows of opportunity. Developing countries now have opportunities to catch up, reduce poverty, and at the same time help tackle climate change and set the world on a more sustainable course.
While green tech exports from developing nations rose to $75 billion from $57 billion between 2018 and 2021, their share of the global market fell to 33 per cent from 48 per cent. During the same period, green exports from developed countries jumped to $156 billion from $60 billion.
UNCTAD’s analysis shows that developing countries must act quickly and move to a development trajectory leading to more diversified, productive, and competitive economies. Previous technological revolutions have shown that early adopters can move ahead quicker and create lasting advantages.
WANTED: AGENCY AND URGENCY
Proactive industrial, innovation, and energy policies targeting green technologies are needed in developing countries so they can benefit from the green tech revolution, said Shamika N. Sirimanne, director of UNCTAD’s technology and logistics division.
“Developing countries need agency and urgency in coming up with the right policy responses,” she said. “As developing countries respond to today’s urgent interconnected crises, they also need to take strategic, long-term action to build innovation and technological capacities to spur sustainable economic growth and increase their resilience to future crises.”
UNCTAD calls on governments in developing countries to align environmental, science, technology, innovation, and industrial policies, and urges them to prioritize investment in greener and more complex sectors and provide incentives to shift consumer demand towards greener goods.
The report also calls for an international programme to guarantee purchases of tradable green items, coordinated green technology research at the multinational level, increased support for regional centres of excellence for green technologies and innovation, and a multilateral fund to stimulate green innovations and enhance cooperation between countries.
‘LEAST READY’ COUNTRIES
The report’s “frontier technology readiness index” shows that very few developing countries have the capacities needed to profit from such green tech as block chain, drones, gene editing, nanotechnology, and solar power.
Ranking 166 countries based on ICT, skills, research and development, industrial capacity, and finance indicators, the index is dominated by such high-income economies as the Netherlands, Singapore, Sweden and the United States. It also shows that countries in Latin America, the Caribbean and sub-Saharan Africa are the least ready to harness frontier technologies and are at risk of missing current technological opportunities.