Amid deteriorating economic conditions and rising uncertainties, global trade hit a record $32 trillion in 2022, as growth turned negative in the last half of the year and is set to stagnate in the first half of 2023.
The silver lining was the strong performance of trade in “green goods”, whose growth held strong throughout the year, says United Nations Conference on Trade and Development (UNCTAD’s) latest global trade update.
Green goods, also called “environmentally friendly goods”, refer to products that are designed to use fewer resources or emit less pollution than their traditional counterparts.
Defying the downward trend, trade in such goods grew by about four per cent in the second half of the year. Their combined value hit a record $1.9 trillion in 2022, adding more than $100 billion compared to 2021.
UNCTAD noted that the outlook for trade remains uncertain amid ongoing geopolitical tensions and concerns about inflation, high commodity prices especially for energy, food and metals and the risky combination of high interest rates and public debt.
Among green goods that performed especially well were electric and hybrid vehicles (+25 per cent), non-plastic packaging (+20 per cent) and wind turbines (+10 per cent).
“This is good news for the planet,” says Alessandro Nicita, one of the report’s authors, “as these goods are key to protecting the environment and fighting climate change.”
The news comes just days after the UN released its latest climate report in which scientists have delivered a “final warning”, saying rising greenhouse gas emissions are pushing the planet to the brink of irreversible change.
UNCTAD expects green industries to boom as countries scale up efforts to fight climate change and cut emissions.
The organisation, in its recent Technology and Innovation Report 2023, projected the global market for electric cars, solar and wind energy, green hydrogen and a dozen other green technologies to reach $2.1 trillion by 2030 – four times more than their value today.
“The patterns of international trade are anticipated to become more closely tied to the transition towards a greener global economy,” the Global Trade Update says.
While imports and exports of green goods held strong throughout 2022, most products saw their trade start to decline in the second half of the year and the downturn continued in the fourth quarter.
The report shows that global trade in goods, worth $25 trillion in 2022, declined by three per cent in the fourth quarter. But trade in services remained almost constant, finishing the year at $7 trillion.
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