Scale up adaptation finance: UNCTAD report

New Delhi, Oct 28 (IANS): Calling for a transformative approach to climate adaptation with large-scale public investment programmes to adapt to future as well as current threats, the second part of the UNCTAD Trade and Development Report 2021 on Thursday pushed for green industrial policies to drive growth and job creation.

In many developing countries, vulnerability to economic and climate shocks are compounding each other, locking countries into an eco-development trap of permanent disruption, economic precarity and slow productivity growth.

The greater the rise in global temperatures, the greater the damage to countries in the south, science backed with ample data has established.

The report by UNCTAD or the UN Conference on Trade and Development, came three days before the annual climate change negotiations are slated to start from October 31 in Glasgow.

UNCTAD economists insisted scaling up adaptation finance must be on the table in Glasgow and that it should go with reforms of the international financial system to get more climate adaptation funds flowing to the developing countries.

Pointing out that the current funding is less than a quarter of what is needed to reach the 2030 target of $300 billion annually, the report has warned that relying on private finance will not be sufficient for the neediest countries.

UNCTAD has proposed a five-point plan to ensure a development-led approach to climate adaptation and sought green industrial policies as a key from a developing countries' point of view, it said in a global release.

"The report demonstrates that sufficient action to adapt to the climate challenge will require a transformed approach that is proactive and strategic rather than simply retroactive. But developing country governments need adequate policy and fiscal space to mobilise large-scale public investment to face future climate threats, while ensuring these investments complement development goals," UNCTAD Secretary General Rebeca Grynspan said.

The first part of the Trade and Development Report 2021 was released in September. It had provided analysis, facilitated consensus-building, and offered technical assistance for countries to use trade, investment, finance, and technology as vehicles for inclusive and sustainable development.

Stating that most of the agenda-setting discussion on the climate has focused on mitigation, leaving adaptation a poor cousin, the part II of the report said: "This is proving short-sighted and increasingly costly, particularly for the developing world where climate shocks are damaging growth prospects and forcing governments to divert scarce resources from productive investments."

Director of UNCTAD's globalization and development strategies division, and lead author of the report, Richard Kozul-Wright, said: "Climate adaptation and development are inextricably connected and policy efforts to tackle adaptation must acknowledge this in order to have a sustainable and meaningful impact."

The only lasting solution, he suggests, "is to establish more resilient economies through a process of structural transformation and reduce the dependence of developing countries on a small number of climate-sensitive activities".

It is here that the report proposes a "retrofitted" developmental state, empowered to implement green industrial policies, and tuned to local economic circumstances, as the best way forward.



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