The Centre sees climate challenges as a catalyst for targeted investment and technological innovation, enabling countries to build competitive advantages in clean energy and critical minerals. However, such transformation requires more than good intentions: it needs industrial policy — not just government papers, but collaborative processes in which businesses, policymakers and communities build coalitions to make initiatives succeed.

Industrial policy in action

Industrial policy refers to strategic government actions, including subsidies, tax policies, and public procurement, designed to foster the growth and competitiveness of specific industries or economic sectors within a country.

Professor Andreoni is working on industrial policy in the Presidential Economic Advisory Council in South Africa, and in Kenya and Tanzania with the Gatsby Foundation, trying to identify and undertake analyses of feasible strategies.

Most countries face many challenges in moving from aspiration to implementation. This gap can create discontent and dissatisfaction with the broader multilateral system. People don't see conversations around climate change and announcements of strategy translating into concrete change.

The Centre approaches industrial policy by bringing together stakeholders from businesses, governments, philanthropic institutions and other organisations to identify what is actually possible and where there is a convergence of interest. It also works to understand the political economy of countries in terms of power, interests, resources and capabilities rather than a prescriptive or generic approach.

For example, the Centre ran a two-day event in South Africa that convened stakeholders from Brazil, South Africa, Malaysia, Indonesia, alongside G20 delegates from last year’s G20 in Brazil and the current one in South Africa, and African leaders and academics.

Through these initiatives, the Centre helps identify opportunities for transformative investments. Many of these economies need to raise investments both from international and domestic sources, but there is a tendency to favour funding from abroad for fiscal reasons. The Centre emphasises the importance of multilateral processes and South-South cooperation, but also aims to ensure that domestic efforts and coordination are in place, so that internal resources can be mobilised for development.

Multilateralism and the G20: action or paralysis?

Around 8% of global emissions come from steel, and 50% of all industrial emissions come from three sectors: steel and iron, chemicals and plastics, and concrete. Anything from construction materials to cars and computer parts requires high-emissions processes to be produced. 

Changing how we produce things requires changing these processes. We need targeted interventions on industrial policy alongside energy and competition policies, all aligned and contributing towards change. This is something no single market can achieve alone.

In this scenario, the role of G20 and governments becomes critical, and goes beyond establishing where emissions come from and by how much they should be reduced.

However, outcomes from the Brazilian G20 were modest, and the South African G20 process has been slow, giving a sense of paralysis that is not adequate for the urgent actions that countries need to take.

Multilateralism has also seen a dramatic deceleration. It is unclear how the multilateral configuration of geopolitics is evolving, and institutions like the UN face growing doubts about their legitimacy and impact.  

South-South cooperation on climate change could help fill this gap, but it too faces hurdles. Countries often act in narrow self-interest, yet opportunities exist, from food security in southern and eastern Africa to coordinated energy transitions in Latin America.

While there are positive examples, like Indonesia developing critical minerals through regional investment from China and Korea, the current political and economic reality is one of insecurity and lack of regional support.

Leading up to this year’s G20, Professor Andreoni and colleagues recently met with President Ramaphosa of South Africa. They discussed how to ensure that commitments made by advanced economies, such as climate finance pledges under the Paris Agreement and the International Monetary Fund’s Special Drawing Rights, an international reserve asset created to supplement the official reserves of its member countries, will be honoured. In past cases, funding has never materialised.

Support for the Global South comes with the understanding that these countries, particularly in Africa, are paying double the cost of the climate crisis: countries that have not contributed significantly to the rise of pollution levels are now asked to cover the costs of transition.

The politics of a fair green transition

A fair green transition cannot rely on financial transfers alone. It needs to include adequate technologies and to create the conditions for change, such as the replacement of coal, which can have a broader social impact, like allowing access to clean energy.

At the next G20 in South Africa (Johannesburg, November 2025), delegates will have to discuss fair arrangements for countries on the recipient side of policies from the Global North, especially in relation to trade and negotiations. It is paramount that the recipient countries are involved in the process.

There is concern, for example, about the Trump administration tariffs and the EU Carbon Border Adjustment Mechanism (CBAM), a policy tool used by governments to place a price on the carbon emissions embedded in imported goods, primarily to prevent "carbon leakage" where companies move production to countries with less strict climate policies. While forcing Global North companies to be more careful about carbon emissions, it affects the countries that have built industries through export access, dramatically limiting opportunities for further industrialisation in the Global South.

Global South countries cannot just block exports or close themselves off to the global economy. Trade policy can and should be strategic, but not if the only leverage is the threat of withholding critical minerals. Funding commitments must be honoured, and there must be a recognition that the Global South need more resources for a green transition.

It is time to break away from a colonial type of exploitative arrangement. New arrangements must allow Global South countries to invest in local development and benefit from innovation and technology, not simply to supply the raw materials.

Further information

Many SOAS academics have been closely involved with the G20 process and more broadly with work relating to the climate crisis.

Professor Volz and Professor Gabor were part of a team commissioned by G20 Brazil to produce a report called Green and Just Planet.

Along with the work of CSST, much SOAS research, teaching and academic work is centred around climate, including the Centre for Sustainable Finance and the Centre for Development, Environment and Policy, as highlighted in a previous issue of SOAS World.

Together, these efforts reflect SOAS’s ongoing commitment to addressing the climate crisis at the intersection of economics, politics, and social justice

Professor Antonio Andreoni