Partly Cloudy, Partly Clear Skies
As COP28 unfolded in the United Arab Emirates (UAE), amidst much expectations for global commitment to climate action, the glaring inadequacy of progress shone out as the stark reality.
The COP28 is the largest climate conference to date, boasting registration from 97,000 politicians, diplomats, journalists, and campaigners, underscoring its unprecedented scale and significance. The event, attended by more delegates from the fossil fuel industry this year than ever before, is shrouded in controversy. There is an apprehension that the petroleum industry aims to leverage COP28 to garner consensus on an energy transition pathway that incorporates an enduring longer role for fossil fuels.
Despite the urgency underscored by the escalating climate crisis, the state of climate financing remains disconcertingly stagnant. As it has been for years.
The host country, the United Arab Emirates, has taken a notable stride by committing USD 270 billion in green finance by 2030 through its banks. But then, the conspicuous absence of the world's largest oil producer, the Saudi Arabian leaders, is loud. It provokes questions about issues and commitment levels towards energy transition.
Global climate finance needs to echo the urgency of the situation, with a staggering USD 2.4 trillion annually estimated for the energy transition, climate adaptation, and disaster relief in emerging markets and developing countries.
Loss and Damage fund
But as a sigh of relief, the much-awaited “loss and damage" fund was announced. Administered by the World Bank, the fund aims to compensate poorer nations for the impacts of climate change. Initial commitments stand at USD 720 million, with its inception tracing back to a proposal by Vanuatu in 1991.
Central to the fund's creation is a stark acknowledgement that countries most likely to suffer from climate change are the least culpable. The fund seeks reparation from developed states and major emitters for the profound impacts experienced by those who played minimal roles in causing the climate crisis.
As the effects of global warming intensify, from natural disasters to rising sea levels, the Loss and Damage Fund underscores a collective acknowledgement of the world's failure to avert climate change. This commitment marks a significant outcome from last year's climate talks, with subsequent meetings striving for international consensus on the fund's mechanisms, commitments, and eligibility criteria. The challenge now lies in translating these commitments into tangible actions, as the world grapples with the escalating climate crisis.
Climate & Promise-paralysis
The inertia in mobilising substantial financial resources for climate initiatives reflects a concerning lack of commitment from the international community. While rhetoric on addressing climate change amplifies, tangible financial contributions fall short of the ambitious targets set in previous agreements. The chasm between words and deeds undermines the effectiveness of global efforts to mitigate the impending environmental catastrophe. This COP event is no different.
We have continued a troubling pattern of nations prioritising short-term economic gains over long-term sustainability. The reluctance to allocate substantial funds towards climate projects jeopardises the attainment of emission reduction goals and the broader objective of stabilising the planet's climate. Moreover, the asymmetry in climate financing exacerbates the vulnerabilities of developing nations, which bear the brunt of climate impacts without adequate resources for adaptation and resilience. The promised financial assistance to these nations remains elusive, perpetuating a cycle of environmental injustice.
Climate finance encompasses the substantial investments necessary for initiatives addressing the impacts of climate change, categorised into adaptation and mitigation. Adaptation involves proactively countering adverse effects, such as constructing infrastructure to shield coastal communities from rising sea levels. Conversely, mitigation aims to diminish greenhouse gas emissions, achieved through increasing renewable energy usage and expanding forest cover.
The demand for climate finance by developing nations stems from the argument that the historical emissions of the now affluent world over the past 150 years have primarily triggered the climate crisis. The 1992 United Nations Framework Convention on Climate Change (UNFCCC), the foundational agreement for COP summits, mandated high-income countries to provide financial aid to the developing world. However, tangible commitments were only made in 2009 when developed nations agreed to contribute $100 billion annually to developing countries by 2020. The establishment of the Green Climate Fund (GCF) in 2010 served as a pivotal delivery mechanism. The 2015 Paris Agreement reinforced this commitment and extended it to 2025. Despite these agreements, high-income countries have yet to fulfil their pledge.
A stark reality is outlined in a 2021 analysis by the UNFCCC standing committee, indicating that developing countries require a minimum of $5.8 trillion by 2030 to fulfil their Nationally Determined Contributions (NDCs). These contributions outline efforts to reduce emissions and adapt to climate change impacts. This translates to an annual requirement of around $600 billion, significantly lower than the commitments made by developed nations. The yawning gap between promises and actual financial assistance exacerbates the challenges faced by developing nations in tackling the escalating impacts of climate change.
As negotiations unfold at COP28, the urgency of bridging the climate financing gap cannot be overstated. Without a seismic shift in commitment and a tangible increase in financial contributions, the global community risks falling perilously short of its climate targets. The ramifications extend beyond environmental concerns, impacting public health and global trade stability, and exacerbating socio-economic disparities. To this gloom, The Climate Trace project, a non-profit organisation, has added fresh concerns, data revealing a substantial under-reporting of greenhouse gas emissions by countries.
Climate finance falls short as initial goals remain unmet, and adaptation funds for developing nations have plummeted by 15 per cent since 2020, per the UNEP Gap Report. The failure to fulfil finance pledges undermines credibility and deepens scepticism in global climate talks. Reducing the cost of capital for investments in developing countries and enhancing their credit ratings are crucial. Given the pivotal role of private capital in climate finance, development finance institutions must incentivise private investment by offering funds and creating appealing financing arrangements. By de-risking projects, providing guarantees, or leveraging private finance, these institutions can make private investment more affordable.
Climate debate continues…
The cost of inaction far outweighs the investment required for sustainable climate solutions. As the world collectively navigates the complexities of COP28, the true measure of success will hinge on the resolute and immediate mobilisation of robust climate financing, ensuring a sustainable future for generations to come.
India has reaffirmed its right to utilise coal, citing its historically marginal contribution to the carbon crisis with per capita emissions below the global average at 4%. Expressing apprehensions, India highlighted the potential impediment to meeting escalating medical service demands, particularly in remote and underserved areas, if greenhouse gas reduction for cooling in the health sector is enforced. Consequently, India abstained from signing the COP28 Declaration on Climate and Health.
Oil, gas, coal, and their by-products contribute to at least 80 per cent of greenhouse gas emissions. Remarkably, past COPs have failed to acknowledge the role of fossil fuels in global warming. Strikingly absent from decades of decisions at climate change conferences is any recognition of the imperative to eliminate the use of fossil fuels—a glaring omission.
In a significant shift, the draft text for the COP28 final deal introduces three options for consideration by delegates from nearly 200 countries. The first option advocates for an "orderly and just phase-out of fossil fuels," with the term "just" implying a nuanced approach favouring faster phasing out by wealthier nations with an extensive history of fossil fuel consumption. The second option emphasises "accelerating efforts towards phasing out unabated fossil fuels." Meanwhile, a third option suggests avoiding explicit mention of a fossil fuel phase-out.
Will the nations have moral accountability to state the truth, or brush it with diplomacy-laced word-crafting abilities? In the pursuit of honest climate action, science should prevail over semantics and captivating speeches.
