The United Nations Conference on Trade and Development (UNCTAD) is pressing for immediate international climate funding, specifying that Nigeria and other African nations will need approximately N3 trillion by 2030 for effective climate adaptation and mitigation.
This assertion comes from UNCTAD’s latest report titled “Commodities and Development Report 2023: Inclusive Diversification and Energy Transition.” The report emphasizes the challenges faced by commodity-dependent countries like Nigeria. Persistent dependence on the export of specific raw materials – such as oil, copper, and cocoa – has stymied these nations’ economic growth and negatively impacted their populations’ well-being.
The report identifies untapped potential for renewable energy sources, like solar and wind, that could diversify their economies and elevate living standards. However, the transition to renewables requires strategic planning to prevent exacerbating existing inequalities and avoid abandoning substantial fossil fuel assets, which could disrupt communities that rely on the oil and gas sectors.
Highlighting potential pitfalls, the report mentions the potential for increased demand for minerals like lithium and cobalt – essential for green technologies – to derail diversification in mineral-rich countries.
For a sustainable global temperature increase limit of 2°C, the world must leave up to a third of its oil, half its natural gas, and 80% of its coal reserves untouched. Countries, especially those depending on fossil fuel exports, will face significant challenges during this energy shift.
UNCTAD’s findings recommend these nations focus on sectors that can significantly increase job opportunities and incomes. Strategies include identifying key sectors for diversification, tailoring education towards required skills, intentionally attracting foreign investments, and transitioning to low-emission alternatives to reduce greenhouse gas emissions.
According to a report by This Day Live, the problem of commodity dependence weighs heavily on developing countries. From 2019 to 2021, only 12% of advanced economies faced this issue, in contrast to a significant 74% of the world’s least developed countries. The UN’s Human Development Index further underscores this disparity, with 29 of the 32 nations with low human development in 2021 being commodity-dependent.
To overcome past pitfalls, UNCTAD suggests green industrial policies that offer a balanced, inclusive, low-carbon transition. Recommendations for the global community encompass providing financial and technical support, managing price shocks, enhancing cooperation against tax malpractices, focusing on infrastructure investments, and facilitating the transfer of green technologies to commodity-reliant developing countries.
