Economic inequalities could grow as developed countries reap most of the benefits of green technologies, according to United Nations Conference on Trade and Development’s (UNCTAD) Technology and Innovation Report 2023. Green technologies are growing and providing increasing economic opportunities, but many developing countries could miss them unless national governments and the international community take decisive action.

UNCTAD estimated that the 17 frontier technologies covered in the report could create a market of over $9.5 trillion by 2030—about three times the current size of the Indian economy. But so far, developed economies are seizing most of the opportunities, leaving developing economies further behind.

The total exports of green technologies from developed countries jumped from around $60 billion in 2018 to over $156 billion in 2021. In the same period, exports from developing nations rose from $57 billion to only about $75 billion. In three years, developing countries’ share of global exports fell from over 48 per cent to under 33 per cent, as per UNCTAD’s report.

Economic disparities could widen as developed nations reap most benefits of green technologies, as per the UNCTAD Technology and Innovation Report 2023. The report estimates that frontier technologies could create a market worth $9.5 trillion by 2030, but developed economies are capturing most opportunities, leaving developing nations behind.

The report includes a ‘frontier technology readiness index’ that showed that very few developing countries have the capacities needed to take advantage of frontier technologies.

Green frontier technologies are expected to reach a market value of $2.1 trillion in 2030, four times greater than their value today.

The index ranks 166 countries based on ICT, skills, research and development, industrial capacity, and finance indicators. It was dominated by high-income economies, notably the US, Sweden, Singapore, Switzerland and the Netherlands.

Although developing countries are the least prepared to use frontier technologies, several economies in Asia have made important policy changes that have enabled them to perform better than expected according to their GDP per capita. India remains the greatest overperformer, ranking at 67 positions better than expected, followed by the Philippines (54 positions better) and Vietnam (44 better).

The index showed 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.

UNCTAD called on governments in developing countries to align environmental, science, technology, innovation, and industrial policies. It urged them to prioritise investment in greener and more complex sectors, to provide incentives to shift consumer demand towards greener goods and to boost investment in research and development.

Developing countries should also urgently boost technical skills and scale up investments in ICT infrastructure, addressing the connectivity gaps between small and large firms and between urban and rural regions.

But developing countries can’t take advantage of green technologies on their own. Much of the success of their domestic policies will depend on global cooperation through international trade, which would require reforms to existing trade rules to ensure consistency with the Paris Agreement to tackle climate change, the report added.

The report said international trade rules should permit developing countries to protect emerging green industries through tariffs, subsidies, and public procurement—so that they not only meet local demand but also reach the economies of scale that make exports more competitive.

International support to transfer green technologies to developing countries is also critical. The report proposed the application of principles that were invoked against the COVID-19 pandemic, when some countries were allowed to produce and supply vaccines without the consent of the patent holder. This would offer manufacturers in developing countries quicker access to key green technologies.

The report also said that international trade and related intellectual property rules should provide more flexibility for developing countries to put in place industrial and innovation policies to nurture their nascent industries so that new green technology sectors can emerge there.

Furthermore, the report also called for an international programme of guaranteed purchase 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.

Fibre2Fashion News Desk (DP)