Stranded Wealth of Nations?: Diversifying Assets of Carbon-Intensive Countries Under Uncertainty

Countries with carbon-intensive sectors have developed comparative advantages and escaped poverty, but they may face impacts from international climate policies, trade measures, technological trends, and consumer preferences. This report combines qualitative and quantitative analysis to understand these impacts and provide coping strategies. Deep diversification of assets, including natural, physical, human, and intangible capital, is key to managing structural transformations. Countries will use a menu of policies to manage the transition, with different strategies having opportunities and risks.

\n Format: Paperback / softback
\n Length: 400 pages
\n Publication date: 30 September 2020
\n Publisher: World Bank Publications
\n

Numerous nations have attained comparative advantages in energy- and carbon-intensive industries, propelling them out of poverty and fostering shared prosperity. This comprehensive report delves deeper into the potential consequences that carbon-intensive countries may encounter due to uncertain yet plausible developments such as international climate policies, trade measures, transformative technology trends, and shifts in consumer preferences that can influence global demand for fossil fuels and the associated costs of combustion.

The report employs a methodological framework that combines qualitative and quantitative analysis, providing fresh perspectives on understanding impacts and identifying the most effective and sustainable coping strategies. Its key messages encompass the following insights:

• Countries possess diverse carbon-intensive assets, including resources in the ground and built infrastructure, which exhibit varying degrees of exposure and vulnerability to transformative trends.
• Structural transformations are a common historical phenomenon, and numerous coping strategies have successfully transformed risks into opportunities for development.
• Climate change intensifies the ongoing debates regarding diversification strategies in resource-intensive countries. The most effective hedging strategies revolve around comprehensive diversification, encompassing not only the diversification of outputs and exports but also the asset base, encompassing natural, physical, human, and intangible capital.
• Countries will employ a combination of policies to navigate structural transformations, encompassing energy, fiscal, and climate policies, as well as trade measures.
• Anticipating or responding to the shocks associated with the climate transition, certain carbon-intensive countries may opt for early movers, swiftly divesting from carbon-intensive industries, while others may choose to follow suit, and still, others may explore harvester strategies. Each strategy carries its own set of opportunities and risks.

In conclusion, this report serves as a valuable resource for policymakers, industry leaders, and stakeholders seeking to navigate the complex dynamics of carbon-intensive industries and mitigate the potential impacts of uncertain developments on global prosperity. By deepening our understanding of the impacts and implementing robust coping strategies, we can work towards a more sustainable and inclusive future.

\n \n
Dimension: 254 x 178 (mm)\n
ISBN-13: 9781464807824\n \n