COP29 Has A Gigantic Fatal Flaw
We don't just need more climate finance; we need climate finance reform.
The COP29 climate summit is rapidly approaching, and our window of opportunity to mitigate the global self-made catastrophe that is man-made climate change has nearly closed. Make no mistake, this is one of our last chances as a species to ensure a bright future for ourselves. It’s also our last chance to ensure that those who will reap the worst consequences of the climate threat (i.e., developing countries) don’t pay the price for our (developed countries) ecological crimes. The rhetoric leading up to this monumental event seems to be one of hope that we can ensure these downtrodden countries can survive in the coming years. However, this sadly seems to be more akin to propaganda than a solid plan to save humanity.
This all began when leaders of the COP29 announced that they were likely to facilitate “hundreds of billions” of dollars in climate finance to developing countries at the upcoming summit.
It has long been known that those who will suffer the worst impacts of climate change are developing countries. They don’t have the economy or infrastructure to defend, repair, or adapt to the extreme weather and the ecological collapse that climate change will cause. Developing countries are also typically situated in locations that will experience tougher physical consequences of climate change than developed countries. For example, South America, Africa, the Middle East, and South Asia are all set to endure far worse ecological collapse, droughts, extreme heat, cyclones, monsoons, and typhoons than places like North America or Europe. They also contain most of the world’s developing or least developed countries.
Most developing countries have minuscule carbon emissions, meaning they will be forced to suffer greatly for a catastrophe they had no hand in creating. However, there are a handful of developing countries that have enormous carbon emissions, like China, Kuwait, and India. This is because they have, over the past few decades, rapidly grown their economy and internal infrastructure. A country can only feasibly achieve this feat with cheap and rapid energy expansion, and as such, these countries heavily rely on cheap, dirty fossil fuels to power their growth. This causes their emissions per capita to spike. But the reason many of these countries were classified as “developing” for so long was because they were exploited by developed countries (for example, China by Japan, Kuwait by the US, and India by the British), which massively stifled their growth while enabling these already developed countries to grow even further.
So, partly to make this situation more fair, but mainly to ensure developing countries didn’t blow humanity’s carbon budget out of the water by simply trying to survive, developed countries agreed to provide $100 billion in climate finance to developing countries each year until 2020 at 2015’s COP15 climate summit. This, in theory, would enable them to grow using low-carbon infrastructure, meaning their carbon emissions shouldn’t increase too much, and pay for extreme weather protection and repair.
While this might sound like a monumental sum of cash, it is barely enough to make a difference. Some estimates suggest developing countries will require $2.4 trillion per year by 2030 if they are to meet our climate targets and be able to mitigate the worst effects of climate change.
This is why the news that COP29 is on course to replace the COP15 deal with a far more extensive one is huge. It shows we are taking meaningful steps towards deals and commitments that are sufficient enough to make a genuine difference, not just to the lives of the less fortunate but to humanity’s overall climate progress. That being said, this hypothetical new deal is still far short of what is actually needed; it’s just better than we are currently offering.
However, it’s telling that this new deal isn’t actually solving the egregious flaw in the current one.
Reuters recently found out that much of that $100 billion annual climate finance is deeply unethical. Most of it was meant to be in the form of grants, which don’t have to be paid back, as the initial terms highlighted how developed countries shouldn’t profiteer off this deal. However, that isn’t what happened. Instead, the vast majority are in the form of loans, with many of them being way above market rate. The loans that have lower rates instead have highly restrictive terms that force the developing country to use contractors and technology from the lending country, effectively funnelling profits back to the lending country and ensuring the developing country remains dependent on the loaning country’s industry.
This situation is so bad that some developed countries are set to make the equivalent of billions of dollars of profit from these climate loans.
This completely undermines the objective of this deal. Firstly, many of these developing countries are up to their eyeballs in debt and don’t have a strong enough economy to service their debt. Loading them up with even more debt, no matter how small the rates are, is a terrible idea, as it makes their economy even weaker and at greater risk of collapse. Not only that, but being forced to be reliant on a developed country’s industry for your energy infrastructure (as these loans do) puts these countries in a horrific position. It greatly compromises their security, as it can align them with dangerous geopolitics. For example, if they take a loan that forces them to use Chinese solar power and Chinese contractors, and China fully supports Russia’s Western expansion, they could be forced to side with China rather than stay neutral or side with NATO.
Naturally, many developed countries don’t want to take this climate finance, as it is a poison chalice that could undermine their country, open up their country to be used as pawns in a game of global geopolitics chess, and perpetuate the exploitation and profiteering of developing nations by developed nations. But they are still forced to take them, as they have no other option.
Ironically, this can significantly impact the sustainability of these countries. After all, how can they reduce their carbon emissions or mitigate the damages of climate change if their economy collapses and the government gets dispanded or dragged into geopolitical wars? They can’t. For them to successfully limit their ecological impact and increase their environmental resilience, they need to thrive as a country. That can’t happen if the developed world continues to profiteer off them under the guise of climate aid.
Ultimately, simply increasing the amount of this ethically and pragmatically dubious climate finance isn’t going to solve this problem. In fact, it could make it worse by intensifying the issues present. Instead, we need to take a long look in the mirror, understand that we still have some colonialist mentality and bias, and take action to mitigate these factors. Only then can humanity survive the impending climate disaster, as either we all thrive or we all drag each other down.
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Sources: Reuters, Will Lockett, Climate Change News, UN, Climate Change News