Washington: Climate change is already taking place, and as temperatures rise, oceans warm, sea levels rise, and already scarce freshwater resources in some areas decrease, its effects will only worsen. Conflict and migration will be exacerbated by this, especially in the Middle East and Africa’s poorest and most vulnerable countries.
This was one of the messages from attendees at a panel discussion on the topic of “Climate Injustice?,” which was held on Wednesday at the Middle East Institute in Washington. How less developed countries are bearing the brunt of climate change.
In comparison to wealthy, developed Western countries, many poorer nations contribute less to the carbon emissions that cause climate change, but they bear the brunt of its effects, according to Mohammed Mahmoud, director of the institute’s Climate and Water Program.
According to him, three main factors determine which nations are most likely to suffer from the effects of climate change both now and in the future.
First of all, as sea levels rise, countries with extensive coastlines and island nations run the risk of losing land mass and flooding. Additionally, the intrusion of saltwater could “compromise” their sources of fresh groundwater.
Second, even small increases in global temperatures can have a significant impact on countries with a high heat index, particularly those that are close to the equator and receive a lot of solar radiation.
The third and most crucial factor, according to Mahmoud, is the present scarcity of fresh water in some nations.
The distinction between these broad categories is made interesting by the fact that they are all found in the Middle East and North Africa region, the author continued. The likelihood of crises related to climate change increases as more of these problems are faced by nations in the region.
The panelists concurred that a country’s ability to effectively combat the impending threats of climate change is greatly influenced by its economic strength, or lack thereof.
Countries in East Africa, for instance, which are already dealing with the worst drought in decades and have fragile economies, will be less able to deal with the effects of climate change than, say, a Gulf country like Bahrain, which is water-stressed but much better equipped economically to deal with potential problems
Mahmoud stressed the importance of nations’ financial capacity to address climate change-related issues, including their ability to pay for the tools and technologies they require to address their particular issues. The right education and training must also be a part of the overall plan to lessen the effects of climate change, he continued.
Financial stability is crucial, but according to Ayat Soliman, the World Bank’s regional director for sustainable development for Eastern and Southern Africa, there is a certain amount of “injustice” in how various countries are impacted by the global issue of climate change.
She claimed that “we see climate charts are increasing in terms of its intensity” in Africa and the Middle East. She added that many parts of Africa, for instance, are going through their worst drought in years and that millions of people are going hungry.
Since some of the most vulnerable people in the world are being impacted by climate change in Africa, Soliman predicted that there will be a large-scale migration as a result. According to World Bank research, about 90 million people will be forced to leave their homes and find new residences over the course of the next 20 years as a result of the effects of climate change. The already pressing problem of food security in less developed countries will be exacerbated by this.
Soliman predicted that the majority of those packing up and moving will be the poor, the weak, and those who live in rural areas. Conflicts all over the world are and will continue to be caused by climate stress.
The president and co-founder of the Mediterranean Youth Climate Network, Hajar Khamlichi, stated that young people in the most severely affected areas have a crucial role to play in the successful implementation of international agreements that guide global action on climate change. As a result, it is crucial that they participate in the process and are heard, which is not always the case.
He added that this failure has an impact on national and international strategies to combat the effects of climate change. “The voice of young people is not heard in the Arab World,” he said.
Before Moving towards Net Zero thinking, elaborated on Property Reporter, let us try and get to know what it is. Put simply in the UN.org, net zero means cutting greenhouse gas emissions to as close to zero as possible, with any remaining emissions re-absorbed from the atmosphere by oceans and forests for instance.
Moving towards Net Zero thinking
By GINA DINESEN of BOYER DESIGN
13TH DECEMBER 2022
As the property industry continues along the path towards net zero, one of the areas in which substantive improvements can be made is at the earliest stages of the property lifecycle, and in doing so, there is much that can be learnt from Norway, as Gina Dinesen, Architectural Assistant at Boyer Design explains.
Norway, the skiing-obsessed country somewhere close to the North pole, usually arouses little global interest – but in relation to its long-term practice of sustainable development, there is much that other countries can learn from Norway. In fact, the term ‘sustainable development’ was invented back in 1987 by Norway’s then prime minister Gro Harlem Brundtland, when The Brundtland Commission defined sustainable development as ‘Development that meets the needs of the present without compromising the ability of future generations to meet their own needs’.Since then, Norway has been focused on sustainable development and more specifically, zero-emission research.Zero-emission construction sitesIn 2020, the construction industry contributed 23% of the world’s CO2 emissions across its entire supply chain, with approximately 5.5% coming directly from construction sites. These emissions are predominantly a result of the combustion of fossil fuels to power machinery and equipment. As the energy efficiency of building use has been ambitiously tackled over the past decade, the focus increasingly shifts to embodied carbon: the emissions footprint of material extraction, production, transport and construction works.
Oslo was the first city to launch a zero-emission construction site, using only electric machinery to complete street renovation works. In 2020, fully fossil-free construction sites were introduced in Trondheim, Norway’s third largest municipality, Copenhagen in Denmark and Helsinki in Finland.
Oslo achieves something similar through its Business for Climate Network. Today, over 130 businesses work towards Oslo’s climate goals, which include zero-emission construction sites. The businesses actively take part in the creation of strategies, toolkits and monitoring within the field of emission, reduction and adaption. The network also acts as an arena for dialogue, where the Climate Agency can inform the business community about priorities and policies, and best practice can be shared. Oslo Municipality has also developed Standard climate and environment regulations for practitioners in the construction industry, which measure any violations of environmental regulations as a proportion of the contract value.
Zero-Emission neighbourhoods
Norway also specialises in zero-emission neighbourhoods (ZENs), which aim to reduce direct and indirect greenhouse gas (GHG) emissions, ideally to zero. This takes into account lifecycle modules, building and infrastructure.
The priorities for the ZEN neighbourhoods are:
· Plan, design and operate buildings and associated infrastructure towards zero GHG emissions.
· Become highly energy efficient, and powered in large part by renewable energy through a neighbourhood energy supply system.
· Manage energy flows (within and between buildings), and also exchanges with the surrounding energy system, in a smart and flexible way.
· Promote sustainable transport patterns and smart mobility systems.
· Plan, design and operate with respect to economic sustainability, by minimising total lifecycle costs and lifecycle system costs.
· Plan and locate local amenities to provide good spatial qualities and stimulate sustainable behaviour.
· Continue to develop the area through innovative processes, based on new forms of cooperation between the partners, and leading to innovative solutions.
Designing and planning a ZEN is an interdisciplinary task and is achieved by conveying knowledge and skills within a larger societal and historical context and understanding. It concerns physical science, energy efficiency, selecting the right low-carbon building materials, calculating energy storage capacity, designing energy-producing buildings, and planning for green mobility and zero waste.
Most importantly, creating a ZEN involves winning the hearts and minds of local residents and landowners, future residents, politicians and decision-makers, developers, architects, engineers, and builders: communicating the potentially transformational benefits a zero-emission neighbourhood is paramount.
The importance of research
It follows therefore that achieving a ZEN means following the research and acting upon it. FME Research Centre, part of SINTEF at the Norwegian University of Science and Technology researches zero-emissions areas in smart cities. It participates in the development of modern solutions and has identified how a future-focused relationship between people, their homes and the environment can be established. Specifically, its vision in relation to ZENs is, ‘To develop solutions for future buildings and neighbourhoods with no greenhouse gas emissions and thereby contribute to a low carbon society.’
Together with public and industry partners, the FME Research Centre has developed nine test areas which are spread across Norway, and research is tested through case studies.
One of these pilot projects is the ZEN living lab, Ydalir, in Elverum, Norway. Ydalir is a residential development of approximately 1000 homes, with a nursery, school and additional services. Ydalir School, completed in 2020, uses wood as a construction material, for cladding and for interior surfaces. This was the primary tool in reducing the project’s total carbon footprint.
Research into sustainability isn’t limited to low emissions: social sustainability is of equal importance. An important objective in the research being carried out at Ydalir is to understand what constitutes a ‘good life’ in Elverum. This involves collecting stories from Elverum’s population and research has been conducted with a variety of groups within the population on their experience of Elverum. At Ydalir, arrangements are made for a sharing economy, such as car sharing, guest apartments and communal living rooms, as well as housing for a diverse mix of inhabitants. Considerable attention is paid to external surroundings, both from a social and practical point of view.
One of the early conclusions of FME ZEN is that sustainable neighbourhoods are so much more than a collection of homes constructed of four walls and a roof, instead, they are good places to live, where a sustainable lifestyle is possible.
With a change in mindset clearly motivating many stakeholders, the construction industry has a big responsibility to ensure solutions that ‘lift’ neighbourhoods in terms of both zero
emissions and social sustainability. Research bodies such as FME ZEN demonstrate the importance of an external organisation responsible for driving the research and development of net-zero initiatives. An organisation that sets the benchmark and identifies the principles, and provides guidance on how other businesses could start to implement these changes into their projects, is imperative to its successful implementation.
Lessons learnt
Scandinavian projects have demonstrated the benefit of research, shared between the private and public sectors, and that this is so much more than a tick-box exercise. It also demonstrates the importance of lifecycle thinking: from construction to everyday living.
The real benefit of the work conducted by these bodies has been sending a signal to the market: around the world, there is a lot that we practitioners could learn from Norway’s example.
In the summer of 2022, cascading climate risks and options for resilience and adaptation in the MENA are evident for all to witness. A write-up by Cascades.eu deserves to be looked at again, and every word in it is worth this trouble. It is a report on the southern face of the Mediterranean Sea and its northern facade.
This report assesses the current situation and future projections of possible and likely biophysical climate impacts in the MENA region, based on a literature review, news articles and CASCADES climate impact data analysis.
Cascading climate risks and options for resilience and adaptation in the Middle East and North Africa
Climate change is a shared challenge for the MENA and European regions
The societies of Europe and the Middle East and North Africa (MENA) are historically, socially and economically intertwined. Climate change presents a shared and urgent challenge. Stretching from Morocco in the west to Syria in the north, Iran in the east and Yemen in the south, the MENA region covered by this report comprises 19 countries and is home to an estimated 472 million people, with a fast-growing young population. Conditions are diverse with some nations registering among the highest national income per capita in the world (e.g. Qatar, Kuwait, UAE) while others are low-income, conflict-affected societies, where human displacement and extreme poverty are rife (e.g. parts of Syria, Iraq, Yemen, the Occupied Palestinian Territories and Libya).
The MENA region is exposed to physical climate impacts that threaten human life and political stability on several fronts. Water and agricultural production are particularly sensitive to the extremes of global warming, given the region’s already arid and semi-arid climates. Sea level rise threatens rapidly expanding urban and industrial coastlines over the next century and most cities are ill-prepared for the ravages of cyclones, sand storms and flooding. Humidity may become the most serious challenge to human life, especially for coastal cities.
The Middle East and North Africa (MENA) region covered by this report
Climate change is already interacting with more immediate threats from armed conflict, environmental degradation, corruption and social and gender inequalities. Such compound conditions have worsened the humanitarian fallout from flooding in war-torn Yemen and facilitated extremist militant recruitment in drought-affected northern Iraq. Across the region, the role of long-term environmental mismanagement in worsening the impacts of climate change is brutally clear.
How communities and governments respond to evolving climatic conditions will affect the severity of effects that cross borders and continents, ‘cascading’ into European societies. As witnessed with forest fires in Lebanon in 2019 and recent water shortages in Iraq, Iran and Algeria, government failure to deal with environmental stress can trigger violent, potentially revolutionary, protests. Figure 1 illustrates variation in the capacity to cope with and adapt to climate threats. While all countries are challenged by their levels of fresh water relative to population and none are ranked as politically ‘sustainable’, some have a larger economic cushion to enable adaptation than others. The countries towards the right of the figure, affected by war and economic crisis, are the most vulnerable.
At the same time, climate change policies and rapidly changing costs of technology will alter oil- and gas-dominated trade relationships with MENA countries. Europe’s demand for petroleum imports is set to decline and new regulations for green growth and alignment with the Paris Agreement goals will affect imports and foreign investment. As Figure 2 shows, most countries would not be able to sustain their current economies for long with oil prices below
$50/barrel. These present both challenges and opportunities for MENA countries and several are pursuing long-term visions for economic diversification, the success of which will depend on new investment and trade relations.
The MENA region already imports more than 50 per cent of its food and will require increasing foreign exchange to meet growing demand. Meanwhile, sensitivity to food price rises due to, for example, droughts in other parts of the world, is high.
Figure 1. MENA country variation in renewable freshwater availability, socio-political stability and spending capacity
Figure 2. Oil and gas dependence in selected MENA exporter countries
Climate resilience strategies, green economic diversification and investment in long-term adaptation are critical to achieving sustainable peace and prosperity in the region. The European Union (EU) and European countries can harness existing relationships, investments and capacities to contribute to this effort. These range from the EU’s evolving neighbourhood partnerships, humanitarian assistance and development bank lending to traditional bilateral diplomacy, trade agreements and engagement with UN bodies. The EU is already extending the principles of its Green Deal to partnerships in its Southern Neighbourhood with reinvigorated commitment to green transition and climate resilience through the Agenda for the Mediterranean. With a fast-changing combination of conditions intersecting with climate change, EU institutions and businesses will need to both learn lessons from the past and anticipate new realities on the ground.
The purpose of this report
This report assesses the current situation and future projections of possible and likely biophysical climate impacts in the MENA region, based on a literature review, news articles and CASCADES climate impact data analysis.
The authors adopt a water–food–energy nexus perspective, given that this resonates with environmental interests in the region. However, this concept remains open to new understandings that put a greater emphasis on ecosystems and well-being – for example, air quality, biodiversity and nutrition. Irrigation for crops and agricultural processing, water for energy, energy for potable water as well as oil and gas revenues to pay for food imports are some of the dependencies that climate change is challenging in the region. These are also some critical areas offering opportunities for resilience-building.
Scenarios illustrate ways in which climate impacts in the MENA could compound other stresses and cascade, with effects that cross borders and affect Europe and European interests. Figure 3 shows a generic example of cascading risks. We highlight five subregions: Iraq (with relevance for Iran and Syria), North Africa, the Jordan Valley, the Nile and the Gulf Cooperation Council countries. Sister CASCADES studies on the Euphrates–Tigris Basin and North Africa, which are referred to in this study, provide more insight. The purpose of the scenarios is to enhance understanding of how resilience and adaptive actions might help to mitigate risks and limit the scope of harm that climate impacts could set in motion.
Figure 3. An example of climate-related risks in the MENA that can cascade across borders
Research benefited greatly from a series of interviews and workshops with regional experts. There are significant geographical, climatic and political differences between the subregions and within several countries. As such, this can only be a broad-brush introduction to the changes taking place and their interactions with ongoing resource and societal issues. The views and opinions of experts in the region have shaped the report’s discussion of vulnerability and resilience factors, the scenarios for the future and the recommendations.
Key findings
Climate impacts are damaging human security in the MENA, yet resilience to climate change has been low on most public and political agendas. Climate change, particularly in the form of drought, flooding and storms, is already threatening lives and economies. The water and agricultural crises in Iraq are a case in point. Authorities and people in the region have generally not considered climate change and environmental health urgent issues, given more immediate threats of war, poverty, unemployment and human rights abuses. However, this is changing. In Oman, for example, cyclone devastation has spurred greater attention to disaster risk reduction (DRR) preparation for climate change. Civil society, particularly in parts of the Levant and North Africa, is increasingly vocal on environmental issues, often tackling them through a heritage conservation, local economy or social justice lens.
The two upcoming climate summits (COP27 and COP28) to be hosted by Egypt and the UAE, and the Saudi-led Middle East Green Initiative provide platforms for stronger cross-regional coordination and international partnerships.
Over the next 30 years, current water use, agricultural and building practices will become untenable; beyond 2050, liveability in the MENA region will be determined significantly by our global emissions trajectory. Irrespective of mitigation, cumulative emissions mean that the current warming trajectory will continue until at least around mid-century. While there are fewer long-term projections focusing on a 1.5°C scenario, this would suggest a far less damaging prospect for MENA countries than 2°C+, given existing aridity and coastal exposure. The extent of coastal land mass loss through sea level rise in this century will largely be determined by these trends.
Local and regional treatment of the environment is integral to climate risks. In all cases, local human developments and practices such as the density of population, overgrazing and monocropping, urban development on floodplains, damming of rivers, land reclamation and destruction of natural barriers such as mangroves and deforestation affect the vulnerability and severity of impact of climate-related events. At the same time, governance factors such as lack of transboundary water management systems, insufficient rule of law and military occupation affect a society’s ability to take resilience and adaptation measures.
Without effective measures, climate impacts will compound local vulnerabilities and have severe consequences for human lives, livelihoods, economies and security in the region. For example, in the absence of radical changes in water management and food production methods, competition among water users will grow and food security will diminish. While poorer and conflict-affected countries remain the most vulnerable, richer ones also face high risks.
Transition risks will be at least as important as physical climate risks for economies depending on oil and gas export revenues. The sensitivities of failing public services including water provision and electricity, combined with higher food prices and declining ability to pay for imports, could lead to political instability (as shown in Figure 3).
Cascading risk scenarios show how climate impacts in the MENA could affect EU interests, including the prospects for peace, development and business investments, expatriate workers, migration flows, human rights and the demand for international humanitarian aid. They also suggest how things might play out differently depending on national, regional and international factors, which will determine the ability to cope with and adapt to climate stresses. Three broad medium-term meta scenarios – stagnation, fragmentation and cooperation – suggest different outcomes (see Figure 4). The actions of major powers, including the EU, will strongly influence how these factors evolve. More concerted, thoughtful diplomacy is essential to reduce conflict and to address shared environmental issues.
Figure 4. Meta scenarios for 2025–2035 which would affect countries’ ability to respond and adapt to climate change
Recommendations
In early 2022, the Sixth Assessment Report (AR6) of the Intergovernmental Panel on Climate Change (IPCC) made clear that the window of opportunity for climate resilient development is closing and will require transformative adaptation measures. This report identifies urgent priorities for the MENA region in the areas of improving water management, regeneration of landscapes and infrastructure resilience. National stakeholders and their international partners cannot address these effectively without acting within the wider political and economic context to strengthen sustainable peace and good governance.
Firstly, climate resilience and adaptation projects must include co-benefits that meet immediate country needs and align with national aspirations.
Secondly, given the transboundary nature of many of the risks we discuss above, planners should consider how measures might promote greater cooperation. This could be through knowledge sharing and technical exchanges, infrastructure that benefits more than one country, cross-border community land restoration and joint early warning systems and DRR cooperation.
Thirdly, deepening engagement with local cultural and religious understandings will be important in fostering stronger, long-term public awareness and more equal partnerships for environmental resilience.
Exploring future scenarios can improve understanding of how climate impacts might interact with societal dynamics, and suggest how investments might foster better conditions for long-term adaptation. For example, a particular challenge noted by regional experts was the lack of enablement at municipal, civil society and micro- to-medium-sized enterprise levels. The immense human capacity of the region, fully inclusive of women and youth, will be essential to address climate and environmental challenges nimbly, and with greater co-benefits for societal well-being.
The report makes six recommendations for EU approaches in the region. The EU should:
Take advantage of its role as a major trading partner of the region to push for regional peace and cooperation through alignment with its European Green Deal. The EU’s Agenda for the Mediterranean (AfM) , launched in 2021, aims to do just this. As cooperation and investment packages develop, careful thought should be given to creating policy coherence across the five key policy areas, and with member states.¹
Provide climate change modelling tools to support national and local scenario building and assist with monitoring and early warning systems for climate-related hazards. Emerging and existing programmes such as Copernicus² and I-CISK³ could be usefully extended or deployed through partnerships to improve local knowledge production.
Explore ways in which remedial and post-conflict rehabilitation work can help address humanitarian needs while fostering long-term environmental resilience. This could include assessing and supporting local action to remediate conflict-affected environments and encourage green infrastructure.
Build climate resilience in cities and subnational areas of the MENA region by developing technical skills to address climate-related issues and manage the water–energy–food nexus. This would build on the ‘human-centred’ approach of the AfM, targeting solutions-oriented capacity building at the municipal and community levels.
Pay close attention to the effectiveness of mechanisms to scale up sustainable finance and disburse funds, taking into account the respective capabilities of centralized bureaucracies versus local agencies and other actors in the area concerned. Greater inclusion of civil society, women, youth and vulnerable groups in consultation and decision- making can help improve accountability.
Use financial instruments for climate resilience and adaptation to empower local actors and build better national to subnational linkages. EU partnerships could, for example, help to scale up projects initiated by civil society organizations that have proven successful by linking them up with the relevant government authorities and making follow-up funding conditional on co-created plans for implementation.
Endnotes
These are: 1) Human development, good governance and the rule of law; 2) Strengthen resilience, build prosperity and seize the digital transition; 3) Peace and security; 4) Migration and mobility; and 5) Green transition: climate resilience, energy, and environment.
Copernicus is the European Union’s Earth Observation Programme.
Innovating Climate services through Integrating Scientific and local Knowledge (I-CISK) is an EU-funded project running from 2021 to 2025.
The supposedly ongoing Energy Transition would most probably be jeopardised in the developing countries as demand for all fossil fuels is projected to grow by two-thirds by 2050. The reasons are that the electric vehicle revolution would have difficulty reaching, let alone solving the climate crisis and creating opportunities for developing countries.
Achieving an equitable energy transition would fail short unless the interests of developed and developing countries are better aligned.
Can the electric vehicle revolution solve the climate crisis and create opportunities for developing countries?
Electric vehicles (EVs) are confidently expected to decarbonize road transportation, contribute substantially to the net zero agenda, and so help to solve the climate crisis. But as Ben Jones points out in a recent WIDER Working Paper, a rapid growth of global supplies of minerals and rare metals is a prerequisite. This in turn opens new prospects for mineral-abundant countries, many of which are less developed economies.
Tony Addison, former Chief Economist of UNU-WIDER, and myself explored these prospects in a series of high-level UN Roundtables over the course of 2021 — an opportunity to communicate our ideas to many critical stakeholders in all continents. Here, and in a related blog, I lay out the opportunities, and risks, that took centre stage during these discussions.
Barriers and risks
It is increasingly assumed that EVs are the future of transportation. The International Energy Agency (IEA) reports that there were some 16.5 million EVs on the world’s roads by 2022. That number is projected to increase seven-fold, by 2040. Annual global sales could rise from 2.5 million to over 30 million by 2030.
But, there are doubters and their doubts do have some substance.
There are several complicating factors that can compromise the promise that EVs are said to offer. These risks should be considered carefully before any country — and particularly any developing country — puts too much skin in the game.
First, there are the high costs of installing sufficient accessible charging points, especially in countries with low levels of electricity access (access levels below 40% are quite common). Second, there are question marks about battery longevity and the costs and technical challenges of both replacements and recycling. Third, the engineering complexities and the task of upskilling mechanics trained on conventional internal-combustion engines (ICEs) need to be considered. Fourth, the greater weight of EVs caused by their heavyweight batteries is a particular concern for low-income countries that already struggle to maintain road infrastructure.
And finally, charging EVs with largely coal-fired power — which would especially be the case in the most populous countries of India and China — will not much reduce carbon emissions.
Opportunities
These risks notwithstanding, there are opportunities for several developing economies to benefit from the EV revolution, but mainly as providers of critical mineral inputs into EV manufacturing, rather than as consumers and users of EVs.
Indeed, a substantial share of today’s global reserves of the key metals needed in quantity for the transition to clean energy are located in lower-income countries. Examples include 68% of lithium, 47% of manganese, 34% of nickel, 40% of platinum, 70% of titanium, 41% of zinc, 46% of copper, and 68% of cobalt.
A recent WIDER Working Paper by Ericsson and Löf ranks 40 lower-income countries that have some potential to take advantage of their endowments of these and other metals. The deeper analysis of this potential in their study is suggested reading for anyone who wants to learn more.
However, the realization of the alleged potential of EVs for developing counties will be far from plain sailing. Here are some of the risks for developing countries hoping to take advantage:
To make EVs renewable, they need to be charged using renewable energy. It is not clear that the additional renewable energy needed will keep pace with demand for EVs, and this will strain global critical metal supplies even further.
Environmental lobbies and governments might well go cold on EVs, as they did previously on diesel vehicles. The overall carbon-reducing credentials of EVs are already under question because of the substantial emissions and other environmental harm associated with the mining and processing of their metallic inputs.
Some of the countries most richly endowed with critical metals are also well-known for unacceptable human rights practices in their mining sectors. The DRC is perhaps the leading example. It provides almost 70% of the global supply of cobalt — a critical battery metal — with an estimated 15–30% of this produced in small-scale artisanal mines that use child labour and environmentally disastrous methods. The discussions at the 2021 UN Roundtables revealed this to be a matter of universal concern.
Another word of caution for resource-endowed developing nations
It is a common political assumption that the mere presence of a critical mineral resource justifies large investments in downstream processing to enhance national value-added. But this can be a seriously misleading assumption. Experience confirms the inherent problems of building viable domestic processing: certainly no developing country can assume that a rich endowment of any critical mineral will lead inexorably to the eventual emergence of a commercially-sustainable industrial output based on those minerals. In a related blog, I probe more deeply into some of the challenges faced to develop such national value-added, using Bolivia’s efforts to capitalize on its extremely rich endowment of lithium as one example.
Strategies for harnessing the potential in developing countries
Many low- and middle-income countries that are already highly dependent on extractive resources have learned how difficult it is to cope with the inherent instability of the prices and the markets in which these resources are traded. The WIDER working paper by Ericsson and Löf referenced above confirms that a large sub-set of those countries have the potential to significantly increase their mining output to meet the new demands for the global energy transition. But, partly for the reasons articulated above, prospects for doing so face uncertainties which are probably even more acute than encountered in the past.
What strategies can help address such uncertainties?
Two modest suggestions can be offered. First, acting on good evidence is vital. High-quality data on mineral endowments is needed — not only their volumes, but also whether they are of marketable quality, commercially viable, and at what price? The geological record underpinning such data is merely the first part of this requirement. Further, all potential supplying countries need to be very well informed about global trends in both EV uptake and above all competing suppliers.
Second, it is important to develop a deep and regularly updated awareness of the market and its uncertainties, and use this to maintain a grounded macroeconomic forecast. This includes the need to be cautious about increasing tax rates on mining products when, in the short term, there are high prices and bullish forecasts of future demand. These are rapidly changing markets; today’s competitive positions can easily disappear.
Alan Roe is a Non-Resident Senior Research Fellow at UNU-WIDER. He has written extensively in both books, academic journals and for other outlets including the first full-scale statistical analysis of flows of funds in the UK. His publications have also included early papers on interest rate policies in developing economies and on the particular problems of monetary management in Africa.
Over the past 25 years there has been lots of research and debate about the concept, the history and state of globalisation, its various dimensions and benefits.
The World Economic Forum has set out the case that the world has experienced four waves of globalisation. In a 2019 publication it summarised them as follows.
The first wave is seen as the period since the late 19th century, boosted by the industrial revolution associated with the improvements in transportation and communication, and ended in 1914. The second wave commenced after WW2 in 1945 and ended in 1989. The third commenced with the fall of the Berlin Wall in 1989 and the disbanding of the former Soviet Union in 1991, and ended with the global financial crises in 2008.
The fourth wave kicked off in 2010 with the recovery of the impact of the global financial crises, the rising of the digital economy, artificial intelligence and, among others, the increasing role of China as a global powerhouse.
More recent debates on the topic focus on whether the world is now experiencing a retraction from the fourth wave and whether it is ready for the take-off of the fifth wave.
The similarities between the retraction period of the first wave and the current global dynamics a century later are startling. But do these similarities mean that a retraction from globalisation is evident? Is there sufficient evidence of de-globalisation or rather “slowbalisation”?
This period was further typified by protectionist sentiments, increases in tariffs and other trade barriers and a general retraction in international trade.
Looking at the current global context, the parallels are remarkable. The world is still fighting the COVID pandemic that had devastating effects on the world economy, global supply chains and people’s lives and well-being.
For its part, the Russia-Ukraine war has caused major global uncertainties and food shortages. It has also led to increases in gas and fuel prices, further disruptions in global value chains and political polarisation.
The increase in the price of various consumer goods and in energy have put pressure on the general price level. World inflation is aggressively on the rise for the first time in 40 years. Monetary authorities worldwide are trying to fight inflation.
Global governance institutions like the World Trade Organisation and the UN, which functioned well in the post-WWII period, now have less influence while the Russian-Ukraine war has split the world politically into three groups. They are the Russian invasion supporters, the neutral countries and those opposing, a group dominated by the US, EU and the UK. This split is contributing to complex geopolitical challenges, which are slowly leading to changes in trade partnerships and regionalism.
Europe is already looking for new suppliers for oil and gas and early indications of the potential expansion of the Chinese influence in Asia are evident.
a movement towards a less connected world, characterised by powerful nation states, local solutions and border controls rather than global institutions, treaties, and free movement.
There’s now talk of slowbalisation. The term was first used by trendwatcher and futurologist Adjiedji Bakas in 2015 to describe the phenomenon as the
continued integration of the global economy via trade, financial and other flows, albeit at a significant slower pace.
The data on economic globalisation paint an interesting picture. They show that, even before the COVID pandemic hit the world in 2020, a deceleration in the intensity of globalisation is evident. The data which represent broad measures of globalisation, includes:
World exports of goods and services. As a percentage of world GDP, these reached an all-time high of 31% in 2008 at the end of the third globalisation wave. Exports fell as a percentage of global GDP and only recovered to that level during the early stages of the fourth wave in 2011. Exports then slowly started to regress to 28% of global GDP in 2019 and further to a low of 26% during the first Covid-19 year in 2020.
The volume of foreign direct investment inflows. These reached a peak of US$2 trillion in 2016 before trending lower, reaching US$1.48 trillion in 2019. Although the 2020 foreign direct investment inflows of US$963 billion are a staggering 20% below the 2009 financial crises level, they recovered to US$1.58 billion in 2021.
Foreign direct investment as percentage of GDP started to increase from a mere 1% in 1989 to a peak of 5,3% in 2007. After a retraction following the global financial crises, it peaked again in 2015 and 2016 at around 3,5%. It then declined to 1,7% in 2019 and 1,4% in 2020.
Multinational enterprises have been the major vehicle for economic globalisation over time. The number of them indicates the willingness of companies to invest outside their home countries. In 2008 the UN Conference on Trade and Development reported approximately 82 000. The number declined to 60 000 in 2017.
Data on world private capital flows (including foreign direct investment, portfolio equity flows, remittances and private sector borrowing) are not readily available. However, Organisation for Economic Co-operation and Development data show that private capital flows for reporting countries reached an all-time high of US$414 billion in 2014, followed by a declining trend to US$229 billion in 2019 and a negative outflow of US$8 billion in 2020.
These declining trends are further substantiated by the evidence of deeper fragmentation in economic relations caused by Brexit and the problematic US/China relations, in particular during the Trump era.
What next?
The question now is whether the latest data is:
indicative of either a retraction from globalisation similar to that experienced after the first wave a century ago;
or it is merely a process of de-globalisation;
or slowbalisation in anticipation of the world economy’s recovery from the impact of Covid-19 pandemic and the war in Ukraine?
The similarities between the first wave of globalisation and the existing global events are certainly significant, although embedded in a total different world order.
The current dynamics shaping the world such as the advancement of technology, the digital era and the speed with which technology and information is spread, will certainly influence the intensity of the retraction of the already embedded dependence on globalisation.
Nation states realise that blindly entering into contracts and agreements with companies in other countries, may be problematic and that trade and investment partners need to be chosen carefully. The events over the past three years have certainly shown that economies around the world are deeply integrated and, despite examples of protectionism and threats of more inward-looking policies, it will not be possible to retract in totality.
What may occur is fragmentation where supply chains becoming more regionalised. Nobel prize winning economist Joseph Stiglitz refers to the move to “friend shoring” of production, a phrase coined by US Treasury Secretary Janet Yellen.
It is becoming obvious that the process of globalisation certainly shows characteristics of both de-globalisation and slowbalisation. It’s also clear that the global external shocks require a total rethink, repurpose and reform of the process of globalisation. This will most probably lead the world into the fifth wave of globalisation.
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