Greener trade, investment crucial to face Asia Pacific climate change: Asian Development Bank
- In Reports
- 09:56 PM, Feb 07, 2023
- Myind Staff
The Asian Development Bank (ADB) on Tuesday said greener trade and investment are crucial for tackling climate change in Asia Pacific, and incorporating a separate chapter on efforts to mitigate environmental concerns in regional trade agreements can help ensure their effectiveness in achieving climate goals.
The Asian Economic Integration Report (AEIR) 2023, released by ADB said Asia is one of the most vulnerable regions to climate change risks, yet it emits the largest volume of carbon dioxide.
Annual temperatures have risen faster in the last 30 years than in any other region, and are now 0.86C above the 19812010 average. Asia is also increasingly facing more extreme precipitation incidences such as storms, floods, and landslides, having borne the brunt of almost 40 per cent of disasters worldwide in the past 2 decades.
Ironically, it is responsible for about a half of global annual carbon dioxide (CO2) emissions, the AEIR said.
Asia and the Pacific's remarkable growth has lifted millions of people out of poverty, but this has come at an environmental cost, said ADB Chief Economist Albert Park.
While trade and investment have fuelled remarkable economic growth in Asia in recent decades, it has also led to large increase in carbon dioxide emissions in the region which is more vulnerable to the effects of climate change than any other.
Reversing this trend will require measures such as promoting trade in environmental goods and services, nurturing green businesses, developing carbon pricing mechanisms, and strengthening regional cooperation through trade and investment agreements, it said.
Trade agreements can be useful for fostering climate policies, yet further progress needs to be made In addition, trade facilitation measures, in particular those promoting digitalization, can help reduce carbon emissions by increasing transparency, simplifying customs procedures, improving border agency coordination, and shortening delays at borders.
Raising the coverage and depth of environment and climate change provisions or incorporating a separate chapter on climate change mitigation efforts into regional trade agreements can help ensure their effectiveness in achieving climate goals, the AEIR said.
Clean and renewable energy goodssuch as solar panels and wind turbines and resource-efficiency goods are critical to reducing greenhouse gas emissions.
The region now finds itself on the frontline of the climate crisis, which can derail development progress. Trade and investment remain one of the most important drivers for growth and poverty reduction, but governments in the region need to intensify their cooperation to make trade and investment greener, Park added.
With regard to the trade in the Asia region, the ADB report said after the strong rebound in 2021 pushed Asia's merchandise trade volume 11.3 per cent higher than its pre-pandemic level, growth in trade has moderated in 2022 and high frequency data indicate a slowdown in the region's trade growth momentum.
To mitigate food security risks posed by supply shocks and logistical hurdles, policy makers should strengthen international cooperation to eliminate trade restrictions and streamline commodity supply chains, promote trade facilitation, and cultivate alternative transportation routes, the AEIR said.
The Asia Pacific region's international trade share was high at 58.2 per cent in 2021, with strong regional value chain, especially in its primary and low-tech sectors. Recent trade cooperation offered by new bilateral and regional trade agreements is expected to help deepen regional value chain linkages further, ADB said.
Image courtesy: Business Standard