Removing International Obstacles to Sustainable Industrial Policy

The report argues that current multilateral governance frameworks—including WTO rules, Investor-State Dispute Settlement (ISDS) clauses, and biased financial risk models—systematically restrict the 'policy space' for developing countries to pursue sustainable industrialization. It highlights that while advanced economies historically used industrial policy to develop, current global norms 'kick away the ladder' for the Global South. The authors call for a 'transformational multilateralism' that reasserts the legitimacy of state-led industrial strategies, reforms restrictive trade and investment treaties, expands access to technology through a 'Global Technology Commons,' and addresses the 'penalisation of poverty' in global finance to enable a just and green transition.

• International trade and investment regimes, specifically WTO rules, limit the use of essential industrial policy tools such as subsidies, export incentives, and technology transfer requirements, with exemptions for Least Developed Countries being insufficient.
• Investor-State Dispute Settlement (ISDS) clauses create a 'regulatory chill' by allowing foreign investors to sue states in international tribunals, which discourages countries from implementing environmental and health protections due to the risk of billion-dollar awards.
• Intellectual property frameworks, including TRIPS and 'TRIPS+' provisions in free trade agreements, restrict access to environmentally sound technologies (ESTs) and manufacturing know-how, perpetuating technological dependence in the Global South.
• Global financial architecture is biased against emerging markets and developing economies (EMDEs), with the cost of capital for renewable energy in Sub-Saharan Africa reaching 15–20%, which is 3-4 times higher than in advanced economies.
• Sovereign credit ratings exhibit a 'penalisation of poverty' by using GDP per capita as a decisive determinant of credit scores, which distorts risk perceptions and increases borrowing costs for lower-income countries regardless of their growth potential.
• The Basel III framework's risk weightings disincentivise long-term productive investment in developing economies by favoring liquid financial instruments over illiquid loans for infrastructure or industry.
• Debt distress is widespread in developing countries, with 61 countries in 2024 seeing debt-service costs exceed 10% of their fiscal budgets, creating a cycle where high risk premiums stifle the investment needed for sustainability.
• Multilateral climate agreements have failed to ensure actual technology transfer, as the UNFCCC Technology Mechanism is limited to information sharing and capacity building and remains chronically underfunded.
• Green industry jobs remain highly concentrated; over 42% of renewable energy jobs are in China, while the entire African continent accounts for only about 2.4% of global jobs in the sector.
• The authors propose the creation of a 'Global Technology Commons' to operationalise patent buyouts, IP waivers, and open-source models for environmentally sound technologies as global public goods.

APA

Abdenur, A., Arauz, A., Baloyi, B., Cantrell, A., Cawe, A., Chang, H.-J., Estévez, I., Ghosh, J., Isaacs, G., Lebdioui, A., & Tregenna, F. (2025). Removing International Obstacles to Sustainable Industrial Policy. Institute for Economic Justice. https://iej.org.za/wp-content/uploads/2025/10/G20-RemovingInternationalObstaclestoSustainableIndustrialPolicy-Nov2025-singles-3.pdf

Chicago

Abdenur, Adriana, Andres Arauz, Basani Baloyi, Aaron Cantrell, Ayabonga Cawe, Ha-Joon Chang, Isabel Estévez, et al. Removing International Obstacles to Sustainable Industrial Policy. Institute for Economic Justice, 2025. https://iej.org.za/wp-content/uploads/2025/10/G20-RemovingInternationalObstaclestoSustainableIndustrialPolicy-Nov2025-singles-3.pdf.

Wikipedia

{{cite report |last1=Abdenur |first1=Adriana |last2=Arauz |first2=Andres |last3=Baloyi |first3=Basani |last4=Cantrell |first4=Aaron |last5=Cawe |first5=Ayabonga |last6=Chang |first6=Ha-Joon |last7=Estévez |first7=Isabel |last8=Ghosh |first8=Jayati |last9=Isaacs |first9=Gilad |display-authors=etal |title=Removing International Obstacles to Sustainable Industrial Policy |publisher=Institute for Economic Justice |date=November 2025 |url=https://iej.org.za/wp-content/uploads/2025/10/G20-RemovingInternationalObstaclestoSustainableIndustrialPolicy-Nov2025-singles-3.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{abdenur2025removing, author = {Abdenur, Adriana and Arauz, Andres and Baloyi, Basani and Cantrell, Aaron and Cawe, Ayabonga and Chang, Ha-Joon and Estévez, Isabel and Ghosh, Jayati and Isaacs, Gilad and Lebdioui, Amir and Tregenna, Fiona}, title = {{Removing International Obstacles to Sustainable Industrial Policy}}, institution = {Institute for Economic Justice}, year = {2025}, month = nov, url = {https://iej.org.za/wp-content/uploads/2025/10/G20-RemovingInternationalObstaclestoSustainableIndustrialPolicy-Nov2025-singles-3.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }