Least-developed countries must not become ‘carbon havens’, warns UNCTAD boss

Rebeca Grynspan, Rebeca Grynspan, director general of UNCTAD (Credit: Wikipedia).

Least-developed countries (LDCs) must not become “carbon havens” for polluters as richer nations phase out emissions-heavy industries from their economies, the head of the United Nations trade and development agency has warned.

With Cop27 looming just days away, Rebeca Grynspan, director general of UNCTAD, said LDCs were feeling “acutely abandoned” as they bear the brunt of one global crisis after another, from a continuing pandemic to climate change, to rising inflation and living costs.

As these “cascading crises” wipe out years of progress, vulnerable countries are falling behind in terms of development,” Grynspan told reporters in Geneva on Thursday ahead of the launch of the agency’s annual LDC report. 

On top of this, they are also paying a disproportionately unfair price in terms of the economic, social and ecological consequences from climate change, she added. 

Despite LDCs accounting for only four per cent of total world greenhouse gas emissions in 2019, they have amassed 69 per cent of the debt caused by climate-related disasters over the last 50 years, the report findings show. 

“This injustice has not been fully addressed by the multilateral system” Grynspan said. “This is especially the case when it comes to climate finance for adaptation and mitigation.” 

She called on countries attending the summit in Egypt to ensure that climate-related policies and regulations “explicitly consider” LDCs so that they do not cause unintended harm.

As of 2021, 46 countries are designated by the UN as least developed countries (LDCs), the majority of them in Africa and Asia, including Bangladesh and Angola, Somalia, South Sudan, and Zambia.

LDCs are especially dependent on the exports of carbon emissions-heavy commodities. Without the right financial resources and technology, most of these fragile countries will not be able to transition their economies, she said. 

They will also not be able to comply with the onset of new climate regulations, which are already beyond their capacity to deal with. 

“Because of this, our report also warns against the risk that LDCs become carbon hub havens,” Grynspan said. “We don't want that; that they do the dirty production that other more advanced economies stamp out of their countries.”

Differences in environmental regulations between countries and their level of strictness means carbon-intensive producers, in the long term, could seek to relocate their businesses to countries with more lax measures.  

“We need to avoid this. Offshoring pollution is not [the same as] eliminating and we are very aware of this difference.”

The report calls for a “green structural transformation” to help LCDs out of poverty and build their resilience to climate risk, for example, supporting them in promoting the efficient use of land, water, and other resources. 

“LDCs are acutely vulnerable to climate disasters and uniquely dependent on commodities with high CO2 emissions. So this is a double negative that is bad for the planet, but it is especially bad for LDCs because it perpetuates under development through the commodity dependence trap.”

Despite both developed and developing countries grappling with the fallout of several crises and the prospect of a global economic downturn, Grynspan said there were solutions to help LDCs finance the green transition. These include windfall profit taxes, which many European countries have been considering levying on companies.