Big emitters refuse to pay

The UN Climate Summit that ended last weekend left many critical issues unresolved. Many of the vital issues that were supposed to be addressed were not in the final communiqué. In fact, the biggest challenges to the climate crisis which were thoroughly discussed during the summit were not in the final agreement.

The majority of countries attending the summit, for example, refused to promise to stop burning fossil fuel.  Instead, they simply repeated other pledges in other climate summits to “face down unabated coal” and to get rid of “inefficient fossil fuel subsidies.” All these pledges were vague enough to allow the wealthy countries to arrive at different interpretations.

Cutting emissions, adapting to a warmer climate and paying for climate cost damage are all linked. In fact, it has been observed that faster decarbonization means a lower bill for adaptation and less spending on rebuilding after disasters. But this is a lesson that the majority of delegates at the climate summit could not seem to agree on how to do these three major tasks simultaneously.

Alok Sharma, who presided over last year’s climate summit in Glasgow, said that more should have been done. He declared: “Emissions peaking before 2025… not in this text. Clear follow- through on the phasedown of coal… not in this text. A clear commitment to phase out all fossil fuels… not in this text.”

The only minor success of the summit was an agreement to “loss and damage fund.” The idea of this is that rich countries should pay the poorer countries to help them deal with climate-related disasters such as floods, rising sea levels and desertification. This concept of loss and damage was actually conceived in 1991 when a small island in the Pacific – Vanuatu – suggested an insurance scheme to pay for the consequences of rising sea level. The justification is that the industrial countries are the biggest emitters of greenhouse gas.

For 30 years, the Vanuatu proposal was rebuffed by major industrial countries who were wary of any suggestion for financial liability for climate change. The biggest emitter which is China and the second biggest emitter, the United States, both refused to cooperate. However, in this last summit, the poorer countries were finally able to convince the European governments to pledge an amount that would set up a climate fund under the auspices of the United Nations. The details of this fund were not agreed upon, but will be agreed upon in the next summit in November next year.

The amount pledged for the fund was $262 million with the bulk coming from Germany. This is a tiny amount compared to the actual need for addressing the problem of climate disasters. For example, early this year, heavy monsoon rains in Pakistan caused more than $30 billion of damage and financial losses. This is nearly 9 percent of Pakistan’s GDP. While the cause of the floods was attributed to La Niña, the heavy rains were made heavier by the effects of greenhouse gases.

The climate summit in its final memorandum created a fund. The problem is that aside from the $262 million in pledges, it is not clear how much more money will end up in the fund. Historically, industrialized nations, especially China, have refused to pay for their sins of emitting greenhouse gases. For example, in the 2009 climate summit in Copenhagen, there was a promise by industrialized countries to raise $200 billion a year to help poor countries tackle climate change by building flood control infrastructure, renewable energy sources and other similar projects. Even if a “loss and damage” fund is set up, there will still be plenty of arguments about how much each industrialized country will pay.

Two of the largest emitters – China and Russia – have refused any participation in this or any similar funds.

There are proposals to estimate a country’s historic emissions and the amount of global warming they have caused.

There is likely to be disagreements also on which countries should benefit from the fund. One radical idea that was proposed during the Egypt summit is that the world’s various development funds like the IMF and World Bank should engage in riskier lending for projects whose purpose is to address global warming. The idea also is to ask these financial institutions to pay less attention to credit rating agencies when assessing loans. This will allow the poorer countries to access all these funds.

In the last summit in Egypt, the only leader of the developed world who supported this initiative was President Emmanuel Macron of France. He also suggested that countries that suffer climate-related natural disasters should be allowed to have their debt payments temporarily suspended. Unfortunately, most of the Western leaders did not sound supportive of this proposal.

It would seem that this tension between rich and poor countries will continue in future climate summits.

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