The greening of South-South trade: levels, growth, and specialization of trade in clean energy technologies between countries in the global South

Abstract

Countries in the global South, or developing and emerging economies, are experiencing rapid economic growth, and increased economic integration with other countries in the global South, including trade. Some analysts have raised concerns that such South-South trade might encourage the use of outdated conventional energy technologies, and lock developing countries into high carbon growth paths. Here, trade data from the UN Comtrade database is analyzed with a gravity model of trade. Results show that levels of clean energy technologies in South-south trade were relatively low up until the first half of the 2010's, but that these are entirely comparable to North-North or other trade flows in recent years. The analysis thus finds no evidence to support concerns that South-South trade might encourage high carbon development. South-South trade contains particularly high levels of solar PV, hydropower, and electric two-wheeler technologies, whilst exporters in the global North are more competitive in markets for wind power equipment and electric vehicles. Trade in electric vehicles is the fastest growing class of clean energy technologies, and the dominance of Northern countries in their exports may mean that South-South trade could, in the foreseeable future, once again lag behind in levels of clean energy technologies.