Climate action: Much like the ozone layer, CoP-28 has three gaping holes

One glaring omission is the lack of any mention of how climate action will be financed. While CoP-28 is being feted for mentioning fossil fuels for the first time in nearly 30 years, radio silence has greeted its unprecedented decision to drop all pointed references to financing. The text retains only vague allusions. Copenhagen’s 2009 CoP first wove in the fiction of $100-billion financing every year till 2020, which 2015 Paris CoP renewed and extended to 2025; but Dubai seems to have formally buried the original idea of climate justice.

There is perhaps a belated realization that developed nations collectively mobilizing financing for climate action by developing nations was always a non-starter. A November 2023 report from the Organisation for Economic Cooperation and Development, a club of rich nations, shows bilateral climate finance—extended mostly by developed country aid agencies and development banks—crossed $30 billion for the first time in 2021. Roughly another $60 billion—extended by multilateral financial institutions, export credit agencies (actually debt masquerading as climate finance) and private finance—is being erroneously passed off as climate finance.

Compare this with the UN’s $6-trillion estimate required to completely wean developing countries off fossil fuels by 2030. Developed countries felt chuffed after sanctioning a $800-million loss-and-damage fund to help countries affected by climate change. This is chump change compared with the current $400-600 billion estimated as climate-related damages annually. But, eventually, all this is minor league stuff, as the budget for CoP-28’s promise to triple renewable capacity by 2050 adds up to over $100 trillion. This is a very conservative estimate, but it still works out to over $3 trillion a year.

Financing is not the only gap in trebling of renewables capacity: technology access in the form of intellectual property rights (IPR) is the other one. There are many forms of renewables—solar, wind, nuclear, among others—but global preferences have mostly centred around solar power, given predictability of output and ease of installation. Progress in India has been slow. According to a research report from a leading brokerage house, as of October 2023, India’s installed solar capacity (both ground-mounted and rooftop) was less than half the total installed renewable capacity. The report also states that capacity addition has been slow.

There are many reasons for the tardy progress, a key one being unreliable grids, which can hamper generation and impair returns. But as demand increases and pressure builds up to scale back fossil fuels, IPR will become another obstacle for capacity addition. Speaking in May 2022, even UN secretary-general Antonio Guterres acknowledged the problem: “Removing obstacles to knowledge sharing and technological transfer—including intellectual property constraints—is crucial for a rapid and fair renewable energy transition." He reiterated his message in September this year, asking that renewable energy technology be treated as a public good, available to all countries and not just the wealthy. Unfortunately, the global stocktake from CoP-28 has plenty of hand-wringing and concern-signalling, but no firm directives.

Some of these concerns could have been ameliorated in the short-term through efficient carbon markets. This is the third large hole in the Dubai declaration. CoP-28 did witness heated discussions on carbon markets, which sometimes stretched into the late hours, but the proposal fell victim to irreconcilable disagreements between the EU and US over how stringent the rules should be. The US favoured a UN monitored platform with not-so-rigid rules to suit developing countries. But the EU was unwilling to accept a system with relaxed rules, especially since it could undermine its own emissions trading system. The EU has even weaponized this system to build protective trade walls around the 27-member bloc.

Activists have argued that no deal is better than a weak one because transparency, human rights or climate ambitions are non-negotiable. The spate of recent scandals amply demonstrates how the system can be gamed; one of the victims, it turns out, was a leading English football club which unsuspectingly purchased fraudulently harvested carbon credits. But what is even more ironic is that a UN carbon market, first suggested as part of the 2015 Paris Agreement, is yet to emerge even after eight years.

Politics, on balance, is mostly a zero-sum game because it usually tends to have winners and losers. In climate politics, it is Planet Earth that always seems to be on the losing side.