Delays only make climate action more urgent

The priority of COP27 in Sharm el-Sheikh aims to ensure the survival of life on this planet as we know it. However, some argue that the goal should be to limit temperature rises above pre-industrial levels to the recommended 1.5°C declared dead: It is no longer realistic.

Adjusting our goals to our mistakes is defeat. If we don’t reduce emissions faster, we’ll end up spending a lot more on adaptation. We will also need to find ways to remove large amounts of carbon from the atmosphere. We may even have to take on the tense option of geoengineering. Certainly, some, maybe even much of it might end up being inevitable. It’s an adjustment, as the flood disaster in Pakistan shows. But we must stop putting greenhouse gases into the atmosphere. This remains a priority.

Again, some argue that those who have used the global carbon sink for free for up to two centuries owe reparations to those who have not. The discrepancy in cumulative emissions per capita is indeed striking. But again, diverting attention from today’s priorities to righting past injustices will lead not to action but to endless and unproductive arguments. (See diagrams.)

So what needs to happen if we are to hope to stay anywhere near the agreed temperature cap? The Energy Transition Commission shows a sobering picture: by 2030, annual CO₂ emissions should be 22 gigatons lower than in “business as usual”; only about 40 percent of this gap is covered by (dubious) commitments; Progress in issuing new net-zero commitments and translating them into legislation has slowed; and the likely cumulative emissions of China, India and high-income countries over the next half-century will more than deplete the remaining global carbon budget, making large-scale carbon removal inevitable.

In sum, we are all too likely to fail. The greatest difficulty lies in emerging and developing countries. How must the development of their populations be combined with the containment and ultimately elimination of greenhouse gas emissions? Solving this challenge is not a sufficient condition for global success, but it is certainly a necessary one.

Bar chart of cumulative CO₂ emissions per capita through 2021, showing that today's high-income countries have emitted far more per capita than emerging and developing countries

In the high-income countries and China, the challenge, albeit huge, is politics and politics. In developing countries it is also about access to technology and finance. This is discussed in the Energy report transitions Commission. It is also created in detail Finance for climate protectionby a high-level group of experts.

The problem is soberingly clear. We are facing a global challenge that can only be solved with huge investments, especially in new energy systems. But our capital markets are fragmented by country risks. The only solution is for rich countries to assume a significant share of this risk by providing both bilateral and multilateral concessional financing, thereby stimulating much-needed private capital inflows.

Cumulative GtCO2 emissions (2022-70)

In short, to achieve the necessary change in emerging and developing countries, investment must be accelerated enormously, in parallel, external private financing must be massively increased, the role of multilateral development banks redesigned and significantly strengthened, concessional financing of high-income countries by 2025 from 2019 levels and imaginative ways to tackle developing countries’ debt problems. In round numbers, the world will need to mobilize $1 trillion a year in external financing for emerging and developing economies other than China. It’s not about the $100 billion a year that high-income countries have promised and have yet to deliver. This is about something much bigger.

Annual CO₂ emissions must be 22 Gt lower in 2030 than under business as usual

Without all this, the goals of the Paris Agreement and the Glasgow Pact will not be achieved: they will be prohibitively expensive. Some in the high-income group, spooked by these sums, may be hoping that these countries will spend less and grow less. But aside from being ruthless, it would mean continued growth on today’s destructive path of high emissions and large-scale deforestation. The more transformative and generous path is that of rational self-interest.

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The need is indeed huge. Emerging and developing countries excluding China will need to spend about 4.1 percent of GDP on a “big push” investment strategy in sustainable infrastructure by 2025 and then 6.5 percent of GDP in 2030, up from 2.2 percent annually 2019 This will require radical policy reforms, notably the scrapping of distorting fossil fuel subsidies and carbon prices. One way to achieve the latter could be to keep domestic fossil fuel prices at today’s high levels as world prices fall. A significant portion, perhaps as much as half, of the additional funding needed would, it was hoped, come from domestic resources. But a large part has to come from external sources, via public and private partnerships that provide the needed flows.

Martin-Wolfe diagram shows the additional funding needed between 2019 and 2025 to achieve the Sustainable Development and Climate Goals

But once all of this is laid out, people are likely to conclude that it’s unrealistic. It is not. Most of the additional external funding will come from the private sector and more imaginative use of MDBs’ balance sheets. The high-level group recommends that annual bilateral financing on concessional climate terms should increase by $30 billion by 2025. But that would only be 0.05 percent of the GDP of all rich countries.

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No one can reasonably argue that this would be unaffordable. Rather, it doesn’t, which would be prohibitively expensive. We have a war to fight that we just have to win. We cannot, practically or morally, afford to leave a world with an irreversibly destabilized climate to the future, possibly even the near future. We shouldn’t give up without trying. At COP27 we have to do that seriously.

martin.wolf@ft.com

Follow Martin Wolf with me myFT and further Twitter

https://www.ft.com/content/5198e3ba-997f-4db5-8310-3a68ae91d9f2 Delays only make climate action more urgent

Adam Bradshaw

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