Trade and Environment Review 2021

Trade-climate readiness for developing countries

This edition of UNCTAD's Trade and Environment Review examines the physical impacts of climate change and their effects on developing country economies and trade; the vulnerabilities of developing countries to climate change; costs and finance for climate change adaptation; and finally, ways that developing countries can enhance their trade-climate readiness, i.e., enhance the resilience of their trade to climate change through adaptation actions and economic diversification.

Special attention is given to examining the challenges faced by the poorest and most vulnerable developing countries, specifically the least developed countries (LDCs) and small island developing states (SIDS).

Climate change, and response policies designed to mitigate it, will have different and complex effects on world markets and trade affecting productivity, transportation costs, competitiveness, sectoral comparative advantages, and trade policies. Each developing country will have a unique trade-climate resilience pathway.

This edition of the Trade and Development Review seeks to illustrate how to identify and pursue these pathways. National stakeholders will have to assess how the physical impacts of climate change, and potential response policies, will affect both domestic sectors, and the competitiveness and export capacity of other countries and regions that are competitors for the products they export.

Based on such assessments, and the mobilization of required finance, national stakeholders can take steps to design and implement adaptation actions that can enhance their country's trade-climate resilience.