The COP26 — the 26th United Nations Climate Change Conference — began in Glasgow on Sunday, the 31st of October. What’s on the agenda? Well, apart from the usual climate-related talks, we could also see a bill related to climate change — one that emerging economies will be hoping to present to the more advanced economies so that they can get their business in order.
And in today’s Finshots, we explain why this is in many ways a call to justice
70% of India’s electricity needs are met through coal. And when you burn coal, you get noxious fumes — a cocktail of carbon dioxide (CO2), nitrous oxide (N2O) and other greenhouse gases. In fact, coal-fired plants release more greenhouse gases than any other source of electricity and that’s a massive problem.
Like India, most emerging economies are still heavily dependent on coal. They’ve already incurred substantial costs in setting up coal-dependent energy grids and shifting to renewables isn’t cheap. Take India for instance. Our estimate is that a climate-change plan will cost us more than $2.5 trillion through 2030. To put things in perspective, that’s the entirety of the country’s current GDP!
But with the looming threat of climate change, everyone’s being pushed against the wall. And that’s creating a few problems. The point of contention?
Over the past couple of centuries, advanced economies have burnt their share of fossil fuels to grow their economies. And now when it’s finally time for emerging economies to develop their infrastructure and improve the lives of people, they’re being pushed to adopt costlier renewables.
For instance, India has contributed only about 4% to total planetary emissions since the 1850s. But today, it’s the third-largest emitter of greenhouse gases.
So, what’s the way out?
Enter the calls for climate justice. India’s belief is that the “polluter pays.”
- Advanced economies have historically been big polluters. And, they have to cut back their emissions more drastically and make room for emerging economies.
- But more importantly, they have to “pay” in the literal sense. That means advanced economies must compensate developing economies because it’s their fault we’re being pushed against the wall.
Why is this important?
Because places like India, Pakistan, and Afghanistan are “countries of concern” for climate change as per a recent UN report. The more vulnerable these countries are, the more money they’ll first have to spend to climate-proof their geography and the economy — While simultaneously making the switch to renewable energy.
There’s a bigger problem at hand too. Climate change is increasing global income inequality. It’s the poor countries that are facing the brunt of more extreme weather events. Which means they need the money to set up the necessary infrastructure to adapt themselves to changing conditions.
So, any sort of fund dedicated to fighting climate change will help.
While a fund sounds interesting, is it feasible?
First, the good news.
Yes! There is a fund of sorts. And wealthier nations have taken some initiative. Since 2010, they have agreed to donate and build a US$100 billion per year ‘Green Climate Fund’. The target was to reach this figure by 2020 in a bid to lead climate change efforts in emerging economies.
Now, the bad news.
All that promised money hasn’t been coming in as people expected. This year, the funding is likely to be to the tune of $83-$88 billion. And by 2023, this should rise to $92-$97 billion. That means advanced economies will hit the promised target 3–4 years too late.
And that doesn’t bode well for us.
Why are these rich countries dilly-dallying with their contributions?
Well, let’s just say that incentives are the culprit.
“Part of the problem is that, similar to the overall structure of the Paris Agreement [of 2015] itself, all developed countries are responsible for delivering the cash. There is no requirement that a given country contribute a set amount of funding, creating a classic collective action problem where each country is incentivized to free-ride on the efforts of others.”
There’s no real accountability. And the end result?
46 of the least-developed countries in the world don’t have enough money to protect themselves against the impact of climate change. Between 2014–18, they only received US$5.9 billion. When in fact they need at least US$40 billion a year to adapt to climate change.
So now they are fighting back. They are demanding advanced economies to pay their fair share and help battle climate change. And to this extent, you may see new climate change bills at COP26 this week.