Developing Nations and the Green Economy: Risks, Challenges, and the Road Ahead
Explore why developing nations risk losing the benefits of the emerging green economy amid COP30 discussions. Understand key challenges such as unequal value capture, critical mineral dependence, and technological asymmetry.
Developing Nations Risk Losing Green Economy Benefits
As the COP30 climate summit begins in Belem, Brazil, the Centre for Science and Environment (CSE) has issued a crucial warning: developing nations risk losing the benefits of the emerging green economy. While the green transition offers massive opportunities in clean energy, sustainable technologies, and circular economies, structural inequalities threaten to push the Global South into a new era of economic marginalisation. If developing countries fail to secure value addition and technological capabilities, they may once again become mere exporters of raw materials while the Global North captures the bulk of green wealth.
What is a Green Economy?
A green economy is one that promotes inclusive growth while reducing environmental risks and ecological degradation. According to the United Nations Environment Programme (UNEP), a green economy enhances human well-being and social equity while sharply reducing carbon emissions. It moves away from the resource-intensive, polluting growth models of the past.
The OECD further explains that a green economy emphasises:
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Sustainable production and consumption,
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Renewable energy integration,
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Circular material flows,
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Low-carbon industries, and
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Long-term economic resilience.
Together, these elements help nations transition towards systems that are both economically productive and environmentally regenerative.
Why is a Green Economy Essential?
1. Climate Resilience and Economic Growth
The Economic Survey 2022–23 highlights that India’s green transition represents a $10 trillion investment opportunity by 2070. A green economy ensures that economic growth is decoupled from carbon emissions, allowing developing countries to industrialise without repeating past polluting pathways.
2. Employment and Value Creation
Green industrialisation can transform labour markets. The International Labour Organisation (ILO) estimates that 24 million green jobs could be created globally by 2030, provided supportive policies are adopted. Sectors such as renewable energy, sustainable agriculture, waste management, electric mobility, and green construction offer major employment potential for developing economies.
3. Global Justice and Economic Sovereignty
According to the CSE, the Global South must embed economic self-reliance, local manufacturing, and value addition into its climate strategies. Without this, the green transition might replicate historic inequities where developing nations supplied raw materials but captured only a small fraction of global value.
What Challenges Do Developing Nations Face?
1. Unequal Value Capture
Many developing countries continue to function as raw material suppliers.
A stark example:
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Ivory Coast and Ghana produce over 50% of the world’s cocoa,
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Yet they capture only 6% of the global export value,
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While chocolate manufacturers in Europe and North America capture the majority share.
If this pattern repeats in sectors like green hydrogen, critical minerals, and battery manufacturing, developing countries will gain little from the green revolution.
2. Critical Mineral Dependence
Developing nations such as Chile, Indonesia, and the Democratic Republic of Congo (DRC) hold large reserves of lithium, nickel, and cobalt—the backbone of green technologies. However, they face:
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Price volatility,
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Low bargaining power,
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Limited refining capability, and
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Dependency on foreign technology.
As demand for clean-tech minerals rises, unequal value capture could intensify.
3. Technological and Financial Asymmetry
The World Bank’s “World Development Report 2023” notes that green technology manufacturing is heavily concentrated in China, the EU, and the US.
The Global South contributes less than 5% of global production value for green technologies, undermining its ability to shape future supply chains.
4. Policy and Trade Barriers
Outdated trade rules, lack of technology transfer, and restrictive financing frameworks prevent developing countries from localising green manufacturing. Without reforms in global governance, green industrialisation could remain skewed in favour of the Global North.
Conclusion
The green economy presents a historic opportunity for the Global South—but also a serious risk. If developing nations do not secure their place in value chains, they may once again be locked into extractive roles while others reap the benefits. COP30 and future climate negotiations must prioritise technology transfer, fair trade frameworks, local manufacturing, and inclusive green finance to ensure true global climate justice.
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The Source’s Authority and Ownership of the Article is Claimed By THE STUDY IAS BY MANIKANT SINGH
