29 September 2021

As part of its series of events and seminars, TRENDS Research and Advisory Center held an e-symposium yesterday, September 28, entitled “Climate Change and Economic Growth Sustainability“. The e-symposium discussed the effects of climate change on the sustainability of global economic growth, prospects for current efforts to drive global economic growth generators, and the effectiveness of regional and international measures to combat climate change.

Participants in the e-symposium included: Dr. Wen Wang, Executive Dean, Chongyang Institute for Financial Studies, Renmin University of China; Dr. Shigeto Kondo, Senior Research, JIME Center, Japan; Dr. Venkatachalam Anbumozhi, Director of Research Strategy and Innovation, Economic Research Institute for ASEAN and East Asia, Indonesia; Dr. Anastasia Nevskaya, Head of the EU Studies Section, Institute of World Economy and International Relations, Russia; Dr. Boris Frumkin, Lead Research Fellow, The Institute for Economics and Peace; and Ms. Lea Perekrests, Deputy Director of Operations, The Institute for Economics and Peace, Belgium.

The e-symposium was moderated by Dr. Omar Al-Ubaydli, Director of Research at the Bahrain Center for Strategic, International & Energy Studies (Derasat). Participants emphasized the need to adopt new global policies that offer economic stimulus packages, and to set green and low-carbon development policies on an equal footing with national economic growth.

Costs of Climate Change and Their Relation to Economic Growth

In the first theme, “Costs of Climate Change and Their Relation to Economic Growth”, Dr. Wen Wang, Executive Dean of the Chongyang Institute for Financial Studies at Renmin University of China, and Secretary-General of the Green Finance Committee of China Society for Finance and Banking, outlined China’s policy on carbon neutrality. Provinces and municipalities across the nation are including peak carbon dioxide emissions and carbon neutrality into their own 14th “Five-Year” plans. In addition, the financial system is fully open for green development.

He added that it has become the shared obligation and responsibility of all countries to reduce greenhouse gas emissions and respond to global climate change. This idea has elevated the issue of global climate change from environmental protection and resource utilization to the broader objective of securing sustainable economic development models.

He stressed that China should broaden its vision of emission peaks and carbon neutrality from an international perspective. In so doing, it should continuously explore sustainable financial systems and service models that are consistent with the long-term goal of carbon neutrality. It must also prioritize potential emissions reductions in the information technology sector and place green and low-carbon development policies on an equal footing with national economic growth.

Shift in Energy Sources and Its Potential Impact on Climate Change

Under the second theme, “Shift in Energy Sources and its Potential Impact on Climate Change and Economic Growth of OPEC Members”, Dr. Shigeto Kondo, Senior Researcher at JIME Center, said that the world is increasingly moving from traditional energy sources to cleaner ones in order to mitigate the effect on climate change.

He explained that the shift gives uncertainty over future economic growth of OPEC members, whose economies depend on fossil fuel. There are many forecasts which say that peak oil demand could arrive within the next few years.

Dr. Kondo stated that many international energy companies now are unable to increase investments in fossil fuels due to the increasing demands of environment-sensitive shareholders. The national oil companies of OPEC, however, are not constrained by this factor and are free to invest in those fuels. This might give them relative advantage over international energy companies.

He noted that OPEC member countries will probably be ready to adapt to the conditions by the 2030s, concluding that future forecasts regarding the prospects of OPEC members in next decades will not be as bad as many have predicted.

Viability of Current Policies and Their Impact on Global Economic Growth Generators

The third theme was “Viability of Current Policies and Their Impact on Global Economic Growth Generators”. Dr. Venkatachalam Anbumozhi, Director of Research Strategy and Innovation at the Economic Research Institute for ASEAN and East Asia in Indonesia, talked about current policy challenges regarding climate change mitigation and future opportunities for low-carbon green growth in the post-Covid era.

He stated that the Covid-19 pandemic underscores the urgency of building economies that are resilient not only in the face of pandemics, but also the systemic risks of climate change and the imperative for decarbonization. The pandemic provides opportunities to build back better, in that sustainable development pathways must focus on the agenda of decoupling economic group from carbon emissions, recoupling the economic recovery by creating more employment, and building resilience.

Dr. Anbumozhi noted that the pandemic crisis offers a rare opportunity to mainstream the low carbon green growth objectives into macro-economic planning, national budgets and the financial sector.

He stressed that the new policies will need to reflect transformative elements on ambitious stimulus packages that can help revigorated local economies, generate green employment, and build a more sustainable future.

Causal Effect Between Sectoral Transformations and Climate Change

The fourth theme was “Causal Effect Between Sectoral Transformations and Climate Change”. Dr. Anastasia Nevskaya, Head of the EU Studies Section at the Institute of World Economy and International Relations, Russia, talked about the correlation between climate change and global industrialization.

She stated that the relationship between sectoral shifts and climate change is complex. Carbon emissions need no permission. There are many global policies aimed at reducing carbon emissions, but they are insufficient.

She explained that some developed countries apply various measures to reduce carbon emissions, but the rest of the world needs to adopt similar policies to preserve the global environment. The mechanisms adopted in the European Union to reduce carbon emissions include taxes on carbon emissions sources. Other countries could pursue a similar approach.

Dr. Nevskaya stressed the need to expand global cooperation between companies and countries to reduce carbon emissions. There is also a need to modernize production lines, introduce clean energy in technology and heavy industries, and reduce the carbon footprint in various areas of transportation.

Dr. Boris Frumkin, Lead Research Fellow at the Institute of World Economy and International Relations, talked about climate change and the shift to modern agriculture.

He stated that climate change reports deal with the interactions of global food and climate systems and their transformation from loose arrangements to win-win coordination. This shift has three main aspects: food availability and affordability in the context of achieving zero hunger by 2030, mitigating climate change and adapting agriculture to it, and supporting farmers.

Dr. Frumkin noted that the EU’s new agri-food strategy is the first practical policy option for a climate-oriented food system.

He stressed that combating climate change requires more concerted global efforts and the development of effective policies to reduce the effects of climate change. In addition, there is an urgent need to modify the mechanisms of food systems to reduce carbon emissions, adapt food systems, and provide economic solutions and policies to diversify infrastructure and crops. Farmers should be supported to rely on clean energy sources in agriculture and avoid harmful fertilizers. This will reflect positively on reducing poverty rates.

Regional and International Measures Against Climate Change

Under the final theme, “Regional and International Measures Against Climate Change”, Ms. Lea Perekrests, Deputy Director of Operations, Europe and MENA Region at The Institute for Economics and Peace (IEP), Belgium, stated that IEP’s Ecological Threat Register is a new, timely research product that illustrates both exposure to risk and the ability of nations and their resilience to deal with major impacts.

She stated that the register highlights the global hotspots that are exposed to higher ecological risks, adding that 141 countries are exposed to at least one ecological threat. The Sahel and Middle East regions are among those most exposed to ecological threats.

She noted that through the framework of Positive Peace, IEP is able to provide insights into the impact that these shocks may have on peace and conflict. By using this two-pronged approach to analyze hotspots, we can better assess where climate aid should be directed.