Where Will Global South Rank in New Green Economic Order?

Employees work on the solar panels of the El Romero plant, in
the desert region of Atacama in northern Chile. CREDIT: Acciona

By Inga Vesper
May 19 2020 (IPS)

With widespread
calls for green transitions
in the wake of the COVID-19 crisis,
developing countries are predicted to remain at the bottom of the
global economic ladder, a study claims.

Oil prices have fallen to record lows and climate change is
prompting global economic shifts, but low- and middle-income
countries risk missing out on green opportunities due to their lack
of industrial production expertise.

An analysis in Research Policy measures the green growth
potential of all countries, based on traded products.

Policy makers in developing countries should strengthen green
production capabilities based on their renewable resources and
existing expertise

It found that non-industrialised countries are at a disadvantage,
as they have a smaller knowledge base from which to produce green
products.

The researchers created a new index—the
Green Complexity Index
—which calculates a country’s ability
to competitively export green, technologically-advanced products,
based on a list of 293 products chosen from trade bodies such as
the World Trade Organization, the OECD and the Asia-Pacific
Economic Cooperation.

They examined which green products economies might be able to
transition to, based on current technological expertise.

Lead author Penny Mealy calls this the “ladder of technology
development”.

“In sectors where countries have developed technological
know-how, they can move on and progress to more advanced
products,” says Mealy, an economics researcher at the University
of Oxford. “In many ways, the set of green products mirrors
that.”

This factor could leave developing countries in the lurch, the
study found, as they have fewer areas of green expertise. A ranking
of the Green Complexity Index, demonstrating how countries fared in
terms of green product development between 1995 and 2014, showed
that most developing countries remained near the bottom of the
list.

There are, however, a few promising exceptions, Mealy says.
Uganda, for example, significantly improved its position in the
index due to its expertise in green materials.

The researchers projected that Uganda’s knowledge of plaiting
plant-based materials gives it an advantage in producing
environmentally-friendly mats and screens, which can be upscaled
into brooms and brushes and, eventually, polypropylene
sheeting.

Paul Steele, chief economist at the International Institute for
Environment and Development, an independent research organisation,
says that developing countries whose economies are less dependent
on fossil fuels and monocrops might find it generally easier to
transition to the green economy.

“This can be seen with ecotourism in Bhutan and Nepal, organic
agriculture in Uganda and other parts of Africa, and solar, wind
and hydropower in Laos and Morocco,” he tells SciDev.Net.

Policy makers in developing countries should strengthen green
production capabilities based on their renewable resources and
existing expertise, the researchers urge.

The sooner a country gains green production capabilities, the
more able it is to branch out in the future, the researchers
add.

Benjamin Sovacool, who teaches energy policy at the University
of Sussex, says that a lot of the barriers developing countries
face in branching out has to do with property. “A lot of their
infrastructure is owned by foreign actors,” he says.

South Africa, for example, is seeing large investment from
international actors primarily concerned with their shareholders,
not sustainability. This raises conflicts, Sovacool says, as the
country’s efforts to develop further rely on providing affordable
energy to all, which is easier with fossil fuels.

“You can’t just have renewables for the sake of it, they
have to be cheaper than coal,” Sovacool says.

But Mealy argues that developing countries have one advantage:
They are not locked into complex industrial production systems and
may be able to skip steps in traditional development, such as
fossil fuel reliance for energy production or heavy industry.

“If anyone could leapfrog it’s developing countries because
they don’t have the incumbency effect that developed countries
do,” Mealy says.

Steele agrees: “Overall, developing countries have the sorts
of resources that make it possible to transition to a green
economy, and in some cases, they have more access to the sources
that can power renewables.

“Their economic and policy structures are less locked into the
brown or dirty economies, making green development more
possible.”

This story was originally published by SciDev.Net

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Where Will Global South Rank in New Green Economic Order?

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Where Will Global South Rank in New Green Economic
Order?