A moral test at climate summit: What do rich nations owe poorer ones?

Dec 15, 2018 by

Why We Wrote This

The Paris Agreement was forged in a spirit of unified commitment. Now world leaders must determine how to quantify the obligation to aid developing nations in an energy transition.

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In 2015, the Paris Agreement on climate change rallied the world’s nations around a sense of collective resolve, a spirit of “We’re all in this together.”

Leaders embraced the idea that this global-scale problem requires ambitious action from every nation to cut greenhouse-gas emissions. They also agreed that wealthier nations should help finance the efforts of poorer ones.

Now the spirit of togetherness is being tested.

Some of that money has already started to flow. But a key moment has arrived. Three years later, it’s the appointed time to firm up plans to hit a $100-billion-a-year target for such international transfers by 2020 – and to expand this “climate finance” further from there.

The national and global initiatives are intertwined. Without help, developing nations will be less able to pursue ambitious targets for low-carbon economies. Officials from postcolonial and developing nations in the “global south” say industrialized nations should bring more money to the table – for everyone’s sake.

“If developed economies put off their climate payments any longer, the Paris Agreement temperature goals will slip out of reach, with tragic consequences for people and planet,” J. Antônio Marcondes, chief negotiator for Brazil, writes in an email to the Monitor. “These finance commitments were not mere ornaments to the Paris Agreement. They were fundamental elements in the balance of the Agreement which must be fully delivered for developed countries to meet their historical responsibilities, and for developing countries to reach an even higher gear.”

A higher gear may be vital. The outlook appears daunting on several fronts.

This week came news that, despite global efforts to date, the world’s greenhouse emissions continue to rise, driven especially by increases in China and India. Meanwhile, the United States under President Trump has backed away from its Paris climate commitments, and recent protests prompted the French government to cancel a gas tax designed to curb reliance on fossil fuels.

Still, with all the challenges there’s also hope and a tangible sense of determined optimism in Katowice, Poland, at the 24th Conference of the Parties to the United Nations Framework Convention on Climate Change, known for short as COP24. The ethos of “we’re in this together” hasn’t died out.

“The expected commitments that we’re hearing from developed countries are all positive,” says Leonardo Martinez-Diaz, director of sustainable finance at the World Resources Institute think tank, speaking by phone from Poland. “We don’t know yet what the numbers are going to be precisely, but we do know that there’s a collective sense that this has to be done.”

He notes that, ahead of the summit for climate officials, Germany said it will contribute $1.7 billion to the Green Climate Fund for developing nations, nearly twice the support it gave the last time industrialized nations replenished that fund. That would push Germany toward the top tier of contributors, on a per capita basis.

And the World Bank pledged this week to devote $200 billion over five years to help poorer nations develop their economies in climate-smart ways.

‘Historical responsibility’

To some degree the Green Climate Fund is still earning the trust of donor and recipient nations alike. Some see room for the fund to make decisions both faster and with enhanced safeguards against misuse of the money.

Still, there’s fairly wide support for the general concept behind the Green Climate Fund. The reasons voiced by officials and nongovernment organizations are both moral and pragmatic.

“The emissions come mostly from developed countries. If you look at the emissions produced by a small island in the Pacific, it’s almost zero, but the country can disappear because of rising sea levels,” says Simon Wilson, head of communications at the Green Climate Fund.

“[The developed world] has to take historical responsibility for this,” says Peter Tarfa, director of Nigeria’s Department of Climate Change.

But Mr. Wilson also notes the business opportunities for private-sector firms. And Dr. Tarfa also frames the the issue more broadly.

“It’s not a question of forcing developed countries to pay, it’s a question of getting developed countries to see the benefits of such action and meeting their obligations,” Tarfa says. Reduced emissions bring a benefit to the whole planet. And helping nations adapt to the effects of climate change can mean a reduction in conflict and forced migration.

Akintunde Akinleye/Reuters/File
A power official works on an electric pole along a street in Lagos, Nigeria’s commercial capital. Nigerian officials say that Green Climate Fund support will help the country to diversify energy sources to include more renewables as it moves to expand electricity access.

Nations like Nigeria don’t expect richer nations to pay for all their climate responses. But the needs are significant, and with aid they can do more.

“In Nigeria one of the major challenges is access to electricity. We would like to have more investments in clean sources of energy,” Tarfa says. “We also need environmentally friendly and affordable buildings, because the population is increasing dramatically. Other issues are clean transport and smart agriculture to maximize harvest.”

One atmosphere

Each ton of carbon dioxide affects the global climate whether it was emitted in Stockholm or Shanghai. And increasingly the carbon pollution stems from developing economies where growing populations aspire to join the global middle class. Some say these economies, from Asia to Africa and Latin America, are also where each dollar invested can have the biggest effect.

“More support translates into more action, and that benefits the whole planet,” says a spokesperson for Brazil’s climate delegation, via email, calling Brazil’s clean-energy aspirations “transformational” and “cost efficient.”

The vastness of the global task – slashing greenhouse emissions to stabilize global temperatures while also embracing the rise of a global middle class – brings complexity.

How much money is needed, and where? For what kinds of investments?

“We look at China, we think, ‘Oh they have all this money.’ … It’s kind of going through the Industrial Revolution on steroids,” says Kate Gordon, an Oakland-based expert with Columbia University’s Center on Global Energy Policy. “Sometimes we forget the scale of the challenge they’re facing to try to grow a middle class and grow a developed-country economy in a sustainable way.”

She says “the scale of doing that in China and India and other countries is bigger than the amount of money that they have to deal with it.”

Even when the general need is acknowledged, part of the challenge is building developed-nation commitment to climate finance.

In France, the recent protests by yellow-vested citizens revolved around a fuel tax with revenue going toward deficit reduction, leaving working-class citizens feeling penalized by a new burden on their finances. The uproar doesn’t mean that all action on climate change will be unpopular, but hints at how questions of fairness can be crucial.

“France points to the absolute need to think through the local impacts of macroeconomic policy, [since] ultimately climate policy is economic policy,” says Ms. Gordon.

“There has to be a very careful political strategy to explain to the public why these initiatives and these efforts matter, both domestic and international,” says Dr. Martinez-Diaz of the World Resources Institute. Canada has designed a carbon tax, he notes, so that it recycles revenue back to taxpayers, while giving incentives to move away from fossil fuels.

Building momentum

Climate policymakers also need to ensure accountability in the process for distributing funds even as they try to scale up the dollar volume. The Green Climate Fund isn’t the only channel for climate finance. But it’s a major one, and has been designed with safeguards to ensure careful review of the projects that get funded.

So far its outflows toward climate projects are small – some $1.6 billion in commitments – compared with its longer term goals. But it’s active already in 96 nations.

“In Egypt … [our project is] building the largest solar park in the world,” says the Fund’s Mr. Wilson.

“We think that it is a good model where, at least in principle, decision-making … (through the Board) relies on a system which gives equal voice to developing and developed countries,” says Brice Boehmer of the Berlin-based watchdog group Transparency International, speaking via email. He sees room for the fund to add further safeguards, such as support for whistleblowers and “consultation and participation of civil society.”

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