India and other developing economies are justifiably worried about the damage to growth from COVID-19, Russia’s war in Ukraine, and the global economy’s downturn. But these troubles pale in comparison with the climate catastrophe already resulting from the current trajectory of greenhouse gas (GHG) emissions, whose effects hit developing economies and the poor hardest. That is why it is imperative that COP27 — the United Nations’ climate summit which opens in Egypt from November 6 — makes real advances to stave off the worst effects of global warming. This means going beyond COP21’s important Paris agreement (2015) on national commitments to cut GHG emissions and COP26’s notable Glasgow agreement (2021) to stem deforestation.
The core issues
Despite nervousness in making bold commitments in these uncertain times, a breakthrough must be made in rectifying decades of lopsided emissions by rich countries. They are still unwilling to offset past excesses by extending the massive financing that developing economies need for climate action. Just as problematic is the continuous and heavy burning of fossil fuels by the top five emitters — China, the United States, India, Russia, and Japan — as well as Southeast Asian countries taken together. What is worse, many of their plans are woefully inadequate for reaching carbon neutrality by 2050 to help keep temperatures rise below 2°C as envisaged in the Paris agreement. COP27 would be a success if progress is made on both these issues. One way would be for the summit to name the countries that are most out of line and ask them to do more.
On the other hand, rich countries have already shown that they can mobilise vast resources to tackle global emergencies. They did this in the 2008–09 global financial crisis and spectacularly so in the $15 trillion committed in 2020 (by one estimate), by the major economies to fight COVID-19. But when it comes to climate change, rich countries are failing dismally in raising the UN-goal of at least $100 billion annually in climate finance for developing countries. COP27 should move the needle on this vital area.
Reaching carbon neutrality by 2050 is the absolute minimum for all major emitters if unthinkable scenarios of global warming are to be averted. The reverberating message from COP27 should be that the price for achieving carbon neutrality is a fraction of the cost of having to adapt to an increasingly unliveable planet. Ahead of COP27, Singapore has announced that it will achieve net zero emissions by 2050, a powerful signal even if coming from a country with only 0.1% of the carbon footprint.
Advance the year for net zero
India’s reliance on fossil fuels is extremely high. High GDP growth, India’s biggest goal, just cannot be achieved in the face of runaway climate change. The country has set a target date of 2070 for net zero. China is the world’s leader in renewable energy, but its share of coal and gas in energy production remains over 70%, with the country continuing to finance massive fossil fuel-based infrastructure. China has announced net zero for 2060. India and China awkwardly weakened the goal of COP26 from a “phase-out” of coal power to a “phase-down”. This, however, is the moment to advance their date for net zero to 2050. Energy is responsible for about three-fourths of GHGs in the air, and low carbon energy needs to lead the decarbonisation of the global economy. India’s plan for decarbonisation, even if very gradual at present, will nevertheless need to see a massive switch to renewable energy. Electric power has made progress in adopting renewables in its energy mix, but a far bigger switch from fossil fuel is needed for domestic heating and cooling. Factors in the way of a more ambitious adoption of renewables such as solar and wind include the variability in their generation due to weather conditions, weak transmission grids, and poor financial conditions of power distribution companies.
Banks can scale up climate projects
COP27 should call for the extensive use of markets to help shift the global economy to a low-carbon path. The summit could back a radical shift in countries adopting carbon pricing, for example, via a significant carbon tax on the source of pollution. It should reiterate the need for all countries to eliminate fossil fuel subsidies. In terms of climate financing, something similar could be done to what was achieved during the COVID-19 pandemic, when rich countries raised vast amounts of financing. Climate projects can be vastly scaled up by multilateral development banks, such as the World Bank and Asian Development Bank, all of which have strong climate-action mandates.
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Based on the mixed track record of past summits, expectations may not be high for what COP27 may bring. One way that it could advance the climate agenda is by choosing commitments to be backed by UN-member states that will be seen by governments to be benefiting them — in terms of health and cleaner cities, to name just two examples — and putting their economies on a more environmentally sustainable path that alone can deliver national interests in these tense economic times. India has historically been a hesitant climate actor, not unlike other big emitters. COP27, which will be held at Sharm El Sheikh, Egypt (November 6-18), is a chance for the country to strongly back environmentally sustainable development in its national interest.
Vinod Thomas is a former senior Vice-President, World Bank, and Director General, Asian Development Bank. He is currently Visiting Professor, National University of Singapore. Twitter @vthomas14.