Many commentators predicted total failure in advance of COP26 last year, but the diligence and determination of COP president Alok Sharma helped drive intense and complex negotiations between 120 world leaders.
The outcome was certainly not perfect. The lack of urgency was deeply concerning and pledges to move to net zero CO2 emissions by 2070 far exceeded the timeline demanded by climate scientists. Experts predict that emissions must be reduced by 45% in this current decade to meet net zero around mid-century. Lofty ambitions without immediate, actionable plans will do nothing to achieve this target.
For all the frustrations of Glasgow, however, one clear positive was the UK Foreign and Commonwealth Development Office (FCDO) MOBILIST initiative, a programme aiming to catalyse the large and sustainable capital flows needed to realise developing countries’ development and climate ambitions.
To its credit, the UK government recognised the need not just for fine words and positive signals, but for practical measures to help plug the funding gap for sustainable energy infrastructure in high growth regions where the demand for energy continues to increase exponentially.
The problem of global climate change requires a truly global solution
The so-called advanced and developed nations have had a free ride over recent years: outsourcing and offshoring polluting manufacturing capacity to the developing world and importing the finished goods, whilst taking the credit for reduced CO2 emissions at home. At best this is disingenuous. At worst, it is economically and morally wrong.
The net result of this offshoring, along with rapidly growing domestic demand in some of the fastest growing economies in the world, is that Asia now produces more than half the planet’s 35 billion tons of CO2 emissions. Indeed, our proprietary research shows that the carbon intensity of the GDP of the eight largest economies in Asia is more than four times greater than that of the biggest countries in Europe.
The G7 countries have all had their own Industrial Revolutions, from the UK in the 18th century, to the US, Japan, and Germany in the 19th and 20th centuries. All these periods were marked with rapid growth in innovation, output and living standards which came at the expense of extreme environmental degradation and pollution.
For these countries to now lecture developing nations, or even worse to deny them their own economic transformation, is pure hypocrisy. Instead, they should be working in partnership, helping provide the capital and technology to ensure a fair and just energy transition, which will power the development of Asia’s ever-growing populations and cities.
Over the next 25 years, Asia’s population will grow by more than 650 million and will reach 5.3 billion by 2050. In India, Mumbai alone will have 42 million people – greater than the entire population of Poland today. Add in Kolkataand these two cities combined will have a population greater than either France or the UK. Demand for electricity is certain to grow substantially.
The IMF’s latest forecasts, set out in its October 2022 World Economic Outlook, show that the emerging and developing Asia region is once again set to enjoy the fastest economic growth in the world over the next five years.
In these exciting and rapidly growing countries, where sunshine is abundant and reliable, the wind blows regularly and biomass is available in significant quantity, there is huge potential to develop locally-produced electricity and sustainable energy infrastructure to meet the demands of growing and more prosperous populations. The investment opportunity is substantial.
Can COP27 do better?
As slower economic growth, higher energy prices and rising interest rates, which have led to increasing debt service costs, put strain on government budgets worldwide, delivering on the $100bn annual goal for climate finance to developing countries becomes even more challenging.
This target was already missed ahead of COP26 – a matter noted ‘with regret’ in the official communique – and it is imperative that this pledge does not slip further.
In these unsettling times of war and a cost of living crisis, the answer is not to close borders and retreat into petty nationalism, but to place resilience, energy security and environmental protection at the heart of every economic plan. Every megawatt of local, renewable energy generated reduces dependence on imported fossil fuels and reinforces economic security.
As we look forward to COP27, the great hope is that the parties will match words with deeds and deliver on the promises thus far made but sadly not kept.
Undoubtedly there are significant and competing pressures on government finances, but as former French Prime Minister Pierre Mendes‐France famously observed “to govern is to choose”. Developed nations face the choice of honouring their commitments – or abandoning them – of working in global partnership or in unilateral isolation.
It is time for clear and decisive action as history will judge us as the last generation with the opportunity to act and change the course of climate change.