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UNCTAD relegates climate change in global trade report

The United Nations Conference on Trade and Development (UNCTAD) believes that the Covid-19 pandemic has exposed the fault lines in global supply chains and has called for co-ordinated action to meet the new challenges. But the report fails to recognise climate change as a critical issue that will require co-ordinated cross-border efforts to deal with global warming.

Instead, climate change is relegated to UNCTAD’s sixth policy measure for preparing for major supply chain disruptions. In its latest analysis of the shipping sector, Review of Maritime Transport 2020, the report says the pandemic emphasised the need for a globally synchronised approach to dealing with widespread cross-border issues.

According to UNCTAD, a recognition of this recommendation was made by the Geopolitical Risks and Responses of the Sustainable Ocean Business Action Platform of the United Nations Global Compact.

The compact outlines the need for, “Urgent political action to keep global supply chains moving, stating that ‘the scale, complexity and urgency of the problem call for a comprehensive, systemic and co-ordinated approach at the global level.’ These issues cannot be effectively dealt with on a case-by-case basis, bilaterally or between a limited number of countries,” said UNCTAD.

It would appear that pollution issues would fit this description, but curiously climate change is listed as the last in a list of six policy actions UNCTAD says is necessary in a post-Covid-19 world. It may be that global warming is a slow-burn issue, if you can excuse the term, compared to the immediacy of the current pandemic.

However, the International Maritime Organization’s Marine Environment Protection Committee is due to meet next week to debate the critical issues around climate change and shipping. This discussion will require the type of cross-border response and co-ordinated effort that is suggested will be needed to meet the challenges of a pandemic or similar disruption.

According to UNCTAD protectionism and other obstacles to free trade “comes at an economic and social cost” and so politicians should support trade to effectively sustain growth while avoiding protectionist policies. It is not clear from the report how the UN’s sustainability goals and further growth can be achieved.

In addition, UNCTAD argues that globalisation must be “reshaped for sustainability and resilience,” the report notes the fragility of extended supply chains, arguing that changes to the supply chain must include an alignment with “Sustainable Development Goals and the 2030 Agenda for Sustainable Development.”

Furthermore, UNCTAD said that “Shortening of supply chains through reshoring or near shoring may reduce transport costs and fuel consumption, but it does not necessarily future-proof supply chains against disruptions.”

Robust supply chains should also be at the heart of the digital transformation. Digitalisation should “Enable enhanced efficiencies, including energy efficiency, and productivity in transport (for example, smart ports and shipping). It should also help countries tap e-commerce capabilities and transport facilitation benefits that boost trade.”

UNCTAD’s fourth policy recommendation urges stakeholders to harvest and harness the data that digitalisation will bring through monitoring supply chain processes and developing appropriate policy responses.

“The pandemic has highlighted the potential for real-time data on ship movement and port traffic, as well as information on shipping schedules to generate early warning systems for economic growth and seaborne trade,” said the UNCTAD report.

According to UNCTAD, there is a need to look beyond the pandemic and to steel supply chains against future possible global disruptions. “To do so, it is necessary to formulate plans setting out key actions and protocols to be implemented in response to crises while ensuring business continuity.”

The UN body argues that seafarers must be given “special consideration” with a unified cross-border approach to “crew changeover processes and ensuring standardised procedure and risk management protocols.”

Finally, UNCTAD urges that “Momentum on sustainability, climate-change adaptation and resilience building,” continues subsequent to the resolution of the Covid crisis.

“Current efforts to deal with carbon emissions from shipping and the ongoing energy transition away from fossil fuels should remain a priority. Governments could direct stimulus packages to support recovery while promoting other priorities such as climate change mitigation and adaptation action.”

The UNCTAD report fails to understand that growth, sustainability and the UN’s Sustainability Goals must themselves be a part of a co-ordinated effort. Otherwise, growth without managing carbon and other environmental challenges, such as ocean pollution, plastic pollution, and rainforest degradation will not offer a sustainable future for future generations.

Nick Savvides
Managing Editor

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