GREEN TRADE and investment policies are needed to help mitigate the impact of climate change in the Asia and the Pacific, the Asian Development Bank (ADB) said.
“Asia generates around half of global carbon dioxide emissions, at the same time it also accounts for 40% of national disasters nationwide,” ADB Chief Economist Albert Park said in a virtual briefing on Tuesday.
“International trade and investment have been drivers of Asia’s economic growth and industrialization. With climate change looming, trade and investment policies must be aligned to support climate action,” he added.
ADB Principal Economist Jong Woo Kang said that Asia’s regional integration relies on trade, investment and finance.
“The region has great potential to deepen value chains in high-tech and services industries. Digital technologies and regional cooperation could help streamline remittance inflows and accelerate tourism recovery,” he added.
However, he said that Asia has been both a net importer and exporter of carbon emissions due to its rapid economic growth and industrialization.
“As economic size grows, it produces more emissions. The region remains the most carbon intensive exporter and importer. We have classified most carbon intensive sectors. These sectors account for 61% of Asia’s exports, (showing) Asia’s bias towards dirtier industries,” he added.
Mr. Kang said that cross border investment could be subdued this year, particularly in mergers and acquisitions because of tightening liquidity conditions, a looming global slowdown, and the impact of the Ukraine war.
According to the ADB, digitalization could help lower transaction costs of remittances.
“Remittance inflows were quite resilient after dipping slightly by 1.5%. They rebounded quickly to 3.4% growth in 2021 and 2022 it is expected to increase by up to 4%,” Mr. Kang said.
“Remittance costs are the major bottlenecks. In terms of mode of payment, mobile money shows the most efficient mode of payment. The region can benefit from expanding digital infrastructure,” he added.
The ADB also said that tourism can be boosted with regional cooperation.
“Going forward, we believe regional cooperation will help to address border measures, expand tourism infrastructure, and harness digital technology,” Mr. Kang said.
Cooperation is also crucial for food and energy security, the ADB said.
“Going forward, we believe in prohibiting export restrictions through international cooperation to ensure seamless flow of essential goods,” he added.
The bank said that the region must better integrate trade and investment policy into climate action by shifting to more services-driven economies and taking advantage of technological advancements.
“Facilitating trade in environmental goods and services can help bring down the cost of adopting green technologies and promote knowledge spillovers,” Mr. Kang said. — Luisa Maria Jacinta C. Jocson