UNCTAD's Commodities and Development Report 2023 outlines how commodity-dependent developing countries could pursue inclusive economic diversification in the context of the global energy transition.

Decades of overreliance on exporting a few raw materials, such as oil, copper, cacao and wheat, has hindered these nations' growth and undermined their people's well-being.

Many of these countries have untapped potential for renewables like solar and wind that could broaden their economic horizons and improve livelihoods.

But the diversification process needs careful navigation to avoid worsening inequalities.

The shift to renewables could leave these countries with vast fossil fuel reserves stranded – including abandoned oil fields, plants and equipment – and this will affect the communities and people that depend on industries like gas and oil.

Another risk is that the surge in demand for critical minerals like lithium and cobalt that are needed for green technologies could undermine diversification efforts in mineral-rich countries.

The report outlines actions to avoid past commodity traps. It offers a blueprint for tailored green industrial policies to ensure a fair low-carbon transition that benefits everyone, striking the right balance between the right to development and the need to protect the environment.

Report by the United Nations Conference on Trade and Development