A lack of trust between the developed and developing world, largely over issues of equity and climate finance, needs to be addressed for the climate conference to succeed later this year
World leaders descended on New York this week for the 76th session of the UN General Assembly. The meeting is set amidst a backdrop of deep security concerns in Afghanistan, the impacts of the COVID-19 pandemic on global health, brewing tensions between economic and military behemoths US and China, and of course, the rapidly compounding climate crises. The Assembly floor, so far, has been dominated by a shared recognition that resolution to any of these pressing global issues would depend on the ability to present a common front through cooperative efforts between nations. The world is also acutely aware of how profoundly such efforts depend on the maintenance of inter-governmental trust—a commodity that has stood on exceedingly shaky ground in recent years.
With the crucial 26th session of the UN climate conference (COP26) around the corner, the undercurrents of this trust deficit are threatening to widen the schism between developed and developing nation blocs. While the developed world expects increased ambition from developing economies, especially large ones like India, the developing world has pointed to the chronic inadequacy of action taken so far by developed nations of the Global North. According to emerging economies, effective mitigation and climate action will require enormous amounts of capital and technology from the developed world, a promise that has seen historical obfuscation by richer nations. The shoddy rollout of the global vaccine programme in response to COVID-19 pandemic has only further fostered a sense of discrimination and created deep apprehensions regarding other inter-governmental negotiations, particularly around climate, in the Global South.
Thus far, such apprehensions seem justified. Climate finance by developed nations to the developing world have so far been grossly insufficient compared to their commitments, and remains knotted in a tangle of complicated capital flows.
Experts say that the developing world is under pressure to deliver increased ambition at COP26, despite heavy doubts around financial viability of such pronouncements in the absence of concrete promises of money and technology from the developed world.
Under the Paris Agreement, developed countries, who have also been historical emitters, were mandated to provide climate finance and necessary technology to the developing economies and emerging markets to enable cutting their greenhouse gas emissions. Under the agreement, nations were expected to commit to climate action in line with their national circumstances and capacities, broadly following the principle of Common but Differentiated Responsibility (CBDR). The agreement expected the developed world, already having used up their historical emission quota to industrialise, to take the lead in cutting their emissions faster and at a larger scale than emerging economies.
Turmoil before the moment of truth
Almost a month before its commencement, COP26, stands on shaky ground. One of the biggest challenges ahead of the meet is the difficult diplomatic relations between the two top emitters US and China. US climate envoy John Kerry could not secure any climate promise from China during his visits this year. China put out a statement saying the US’ efforts against global warming were an “oasis, but surrounding the oasis is a desert, and the oasis could be desertified very soon”. In simpler terms, this means China-US climate cooperation cannot be separated from the wider environment of relations between the two countries.
Similarly, Kerry, despite two visits this year, could not get India to announce ambitious climate actions or a net-zero pledge. India has maintained its stance that “reaching net zero alone is not enough” and that developed countries should not only undertake immediate, deep emission cuts and decarbonisation of their economies, but also provide financial assistance owed to developing countries. Despite its per capita emissions being very low compared to the global average, the world’s third-largest emitting nation, India, is under immense pressure to ratchet-up its climate actions at the COP. The top two emitters, USA and China, have announced their net-zero timelines of 2050 and 2060 respectively.
Amidst all this, the group of Least Developed Countries (LDCs), hit hardest by the impacts of climate change, continue to struggle to access adequate COVID-19 vaccines. Incidentally, the COP organising committee has come under attack for failing to guarantee an equal conference with fair representation from around the world.
These events are significant enough to make or break COP26.
United Nations chief Antonio Guterres and this year’s COP host, the UK, are making efforts to salvage the situation at the ongoing UNGA. On September 20, Guterres and UK PM Boris Johnson hosted a closed-door meeting of world leaders in a bid to “build trust”.
“I believe that we are at risk of not having success at COP26,” Guterres said in an interview to the global news agency Reuters before the September 20 meeting. “There is still a level of mistrust, between north and south, developed and developing countries, that needs to be overcome.”
To overcome this challenge, the US is also keen to re-establish its diplomatic dominance in the climate arena after years of absence from the negotiating table. Apart from US climate envoy Kerry’s jet-setting, the White House is hosting Johnson and India’s PM Narendra Modi for talks that reportedly included climate action.
A persistent deficit of trust
The developed world’s blatant disregard for the principle of equity in global vaccination efforts is a familiar example of why poorer nations find it difficult to trust the developed world. “The first thing we have to recognise is that COP26 is happening in the backdrop of vaccine inequity,” Harjeet Singh, senior advisor, Climate Action Network, told CarbonCopy.
“Look at how the developed countries reacted to it. A few [rich] countries and corporations are not meeting their obligations, sharing their resources. And they do not want to change the systems that are fundamentally responsible for the crisis or rather crises,” Singh adds.
In the whole COVID-19 situation, scaling up vaccination within poor nations requires more than emergency aid transfers or a few million vaccines. The fundamental problem is who holds the Intellectual Property Rights (IPR), Singh says. He adds that most of these IPRs are paid through public sources, yet, corporations make money and do not allow patents to be leased to enable local production and distribution of vaccines. This results in a situation where Europe is about 60% vaccinated and Africa not even 6%.
The COVID-19 situation provides a fitting blueprint of how priorities of global powers are likely to get moulded to suit immediate economic interests at times of crises.
“If you look at the climate, it is the exact same trend. Rich countries, instead of reducing their emissions, which have been going up, and meeting their fair share of climate actions, have the audacity to tell the world to take up more climate action, and announce net-zero. The US continues to be one of the top users of coal, it is also heavily into the fracking and natural gas business. The UK, while trying to be a climate champion, continues to support off-shore drilling,” says Singh.
Unfair pressure to announce net-zero
Net-zero pledges are significant, there is little doubt about that. The problem lies in the pressure tactics being employed by many developed countries. This stands particularly true for India, which is currently under pressure to announce a mid-century net-zero ambition at the upcoming COP, says Vaibhav Chaturvedi, an economist engaged with low-carbon pathways at the Council on Energy, Environment and Water (CEEW).
“For a country like India, choosing a year for net-zero is no simple task. A series of deep analyses is a prerequisite to better understand what this would actually entail for the country. Then all stakeholders and relevant ministries in the country collectively can consider these analyses to see what is workable,” he says.
According to Rahul Tongia, a senior fellow at Centre for Social and Economic Progress (CSEP), there are three prominent worrying aspects of net-zero targets. “First, are these really zero, or ‘net’ through futuristic or unfair offsets or, even worse, accounting tricks?” the summary of his new working paper asks. The paper further adds that offsets are unfair when they are based on an ‘all carbon is equal’ theoretical plank even though abating carbon isn’t equal in cost. ‘Economic efficiency’ is skewed to favour high-emitters, who benefit from offsets out of low-emitters (poorer countries) with early-in-the-trajectory abatement.
Second, the paper says, even if one does reach zero, what is the shape of the trajectory to get there? Most countries are conspicuously quiet on the details. The shape would determine the cumulative emissions over time, which is what really matters.
“Third, are all countries expected to reach the target at roughly the same time? Not only is this unfair to low-emitters [who are invariably poorer, developing countries], coming to zero by 2050 would still mean many high-emitters would emit well more than their ‘fair share’ of emissions through most apportionments of a global carbon budget,” the paper says.
However, beyond science or logic, it is the political and economic fine print that will dictate which way the cookie crumbles.
“Ultimately, the developed world sets the agenda for COPs. They will not let go of the net-zero track,” Chaturvedi says. To calm the unrest among developing parties they might just agree to some discussion on climate finance, or make another symbolic promise like the last $100 billion which they never met, he adds. “And this causes the trust deficit among developing countries.”
Incidentally, days after these comments, during his speech at the UN General Assembly, US President Biden announced that the US would be doubling its climate finance pledge of $5.7 billion to $11.4 billion per year by 2024 and “make the US a leader in international climate finance”. Earlier, the EU too, had made a similar announcement as developed nations scramble to cobble together an annual $100 billion pipeline to present at the COP.
Even if history does not repeat, it surely does rhyme. Chaturvedi warns of this COP meeting the same fate as the COP15 that took place in Copenhagen in 2009, which gained infamy as the biggest disappointment among all the sessions of UN climate negotiations. The global situation is very similar to how it was in 2009, he says. The COP followed a global recession and US-China relations at the time were tense.
Climate finance promises that were never met
Climate finance is a major stumbling block for COP26.
Developed economies had committed to mobilising $100 billion annually by 2020 as a step towards their legal obligations under the UNFCCC. To prove that they were doing enough to meet the goal, developed nations commissioned the Organisation for Economic Cooperation and Development (OECD) to prepare progress reports analysing capital flows towards climate-related activities and funds.
Developing countries, which bear the greatest impact from climate change, received $79.6 billion in 2019, as per the latest OECD report released mid-September 2021. This is more than $20 billion below what wealthy nations promised to give every year, starting from 2020. The report also showed that the finance flows stagnated even before the global pandemic. Interestingly, rampant inflation in the US dollar also means that $100 billion at 2010 prices would be equal to around $126 billion today. This effectively gives developed nations a 25% discount on their commitments due to the falling purchasing power of the dollar.
Developing countries have had several issues with the reality of climate finance that the OECD reports portray. Their argument is that in the absence of a standard definition of climate finance, these reports largely overstate the actual money that has come in; basically accusing the developed world of playing accounting tricks. The actual amount of climate finance could be much smaller, a number of national and international assessments like the one prepared by Oxfam, an international think-tank, shows.
By COP26, developed countries need to break down how they will meet and build upon their overdue commitment to jointly mobilise the $100 billion a year. Addressing the climate finance gap is vital to COP26’s success and to restoring trust with developing nations, experts at World Resource Institute, a global think-tank, wrote recently.
“Indeed, the $100 billion annually is only a fraction of what vulnerable countries really need to decarbonise and build resilience to climate impacts, so it should be seen as a floor for climate finance. Developed countries should commit to deliver a minimum of $500 billion total over the 2020-2024 period, and should establish a more ambitious target to be agreed prior to 2025, to support developing countries,” they say.
This sentiment was echoed in a report on the $100 billion target published by the UN late last year. “The $100 billion target needs to be seen as a floor and not as a ceiling. 2021 will, thus, be a critical year–to sustain trust between developed and developing countries, maintain momentum in the run-up to COP26, and to forge a new consensus about the necessary climate action and ambition to achieve global carbon neutrality by mid-Century,” the report states.
New beginnings or more of the same old
“President Biden’s new climate finance pledge is a welcome and important step toward the US doing its share to meet the $100 billion commitment. If the US delivers on this pledge it will become the largest climate finance contributor of any single country, although many other countries will still be contributing more relative to the size of their economies,” Joe Thwaites, an expert on climate finance associated with WRI told CarbonCopy.
The new US climate aid commitment at $11.4 billion by 2024, however, is still far behind compared to the $24.5 billion that the European Union spent on climate aid in 2019. The pledge certainly pales compared to the ‘fair share’ amount of about $43 billion that the US should contribute each year, considering it is the world’s largest economy and more responsible than any other nation for the historical emissions driving climate change.
Over the past decade, the US has been a laggard when it comes to climate finance. Former president Barack Obama pledged $3 billion to the Green Climate Fund, the UN’s flagship climate finance initiative, but delivered just $1 billion before leaving office.
His successor Donald Trump completely abandoned that pledge and in 2017-18, the US delivered less climate finance than France, Germany, Japan or the UK despite having an economy larger than all of them combined.
The commitment shows that Biden understands the importance of increased US climate finance for unlocking ambitious climate action, Thwaites says.
“Delivering the $100 billion is also a matter of trust, and trust matters in international climate politics,” Alok Sharma, UK’s COP26 president-designate wrote in July 2021, emphasising the requirement of a big push on climate finance by the developed world ahead of the all-important meet at Glasgow this year.