UNCTAD Trade and Development Report 2019

November 29, 2019: A webinar was organized at the IBA Karachi by Assistant Professor and Research Fellow (CBER) Dr. Aadil Nakhoda in collaboration with the United Nations Conference on Trade and Development (UNCTAD). The representative from the UN office discussed the findings of the Trade and Development Report 2019 focusing on the Green New Deal.

The presenter highlighted that income from employment is decreasing as a percentage of GDP around the globe. The reason being capital becoming more mobile and thus, more in demand as compared to Labor. Therefore, the wages are decreasing, and inequality is on the rise.

Furthermore, he discussed how despite investment-friendly conditions, real investment has not increased in advanced economies. On the other hand, developing economies invest on safe assets which pay very low returns and premiums with a very high interest rate. He also expressed concern about enforcing strict regulations in the ever-expanding digital world economy. In his opinion, due to the above-mentioned problems achieving the Sustainable Development Goals till 2030 seems unattainable.

The presenter also talked about climatic and how the atmospheric CO2 concentration has drastically increased which will have catastrophic global warming effects. To solve these problems, the presenter proposed the global green new deal as 'the solution we all needed', however it would need a massive amount of money. Huge investments are needed to push a series of interconnected public goods which are the part of green new deal. As per estimates of US authorities, the amount to kick start the ambitious project stands at $1.6 trillion, and per UNCTAD, the amount is a staggering $2-3 trillion. These numbers may look enormous, but this figure only makes up about 30% of global subsidies to fossil fuels and 20% of assets of SWF.

The costs of volatile capital flows and debt implies massive reduction of public resources for green investment. He said instruments should be provided to developing economies to tackle the increasing CO2 emissions. With the increasing lobbying power, global conglomerates are becoming increasingly powerful who use their influence to get regulations which are in their favor.

He said, "In order to have big changes, you need to have bold ideas. Energy, fossil fuels, and transport are the main contributors of CO2 emissions. Now, it's about time that we have greener central banks. Central banks which don't only look at monetary policies but also pay attention to environmental sustainability."

To conclude the session, the presenter emphasized on the urgency to develop instruments to push developing economies towards sustainability because ignoring these problems now will be detrimental for future.