Who Pays For Decarbonizing The Planet

At the COP26, the Indian prime minister announced– somewhat surprisingly– that India will go carbon neutral by the year 2070. The deadline is about two decades longer than most countries’ 2050 deadline and China’s 2060 deadline. It was a surprising move, because India was reluctant to put a date on its carbon neutral journey, unlike other developed countries, primarily because the Indian economy is still growing and so is its carbon emission.

Striking a balance between economic progress and sustainability is hard for a country like India which is still dependent on coal for 70% of its power needs. Not only that, a large portion of the rural and economically backward section of society doesn’t even have access to coal, they rely on wood burning for their cooking and heating needs. The government, the intuitions and people who have access to data and electricity may feel the need for cutting down on coal and fossil fuel use, The push for curbing fossil fuels is reasonable but a large section of the Indian population still relies on them for their livelihood, and phasing them out at a fast pace is not a solution. People who barely have enough money to sustain their family should not be told that their work or their cooking fuel is harmful to the planet. 

Also adding to the complexity is the booming cement, steel and infrastructure market of India fueled by its own rapid pace of development. Cement and steel industries are the biggest of carbon intensive industries. Not only can India not sustain without them, it is going to rapidly accelerate the carbon intensive industries in coming decades to fulfill the domestic demands. Manufacturing one ton of steel produces approximately 1.85 tons of carbon dioxide, and in 2021 India produced 118 million tons of steel. 

Interestingly, India did not just stop at putting a date at its net zero ambitions, it also put forward a demand, a $1 trillion demand. Mr Modi in his address said “It is India’s expectation that the world’s developed nations make $1 trillion available as climate finance as soon as possible.” Now, one trillion is a huge sum of money, especially when developed countries have failed to deliver on the promise of providing financial support to developing nations. At the UNFCCC 2009, the underdeveloped countries who are parties to the convention put forward a demand for setting up channels of financing climate change activities in poor and affected countries funded by  developed countries.The developed countries agreed on a $100 billion investment every year to developing countries by 2020, but according to a report, the $100 billion dollar promise was not completely fulfilled. A report form WRI indicates that if calculated according to countries’ past emission records and wealth, some countries(France, Japan) contributed sufficiently but most (USA, Australia, Canada, Greece) did not contribute enough to the $100 billion sum, making it less, and there was no internal structure determining which country will pay how much. Also, $100 billion is a small amount compared to what countries actually have to spend on climate change mitigation and adaptation, and although it was supposed to be financial aid, certain countries have offered money as repayable loans. At COP26 last year it was brought to notice that the $100 billion limit would not be reached until 2023. 

After all this, it was expected that developed countries will come forward, accept their past irregularities and act in a more accountable manner, but this year at the Bonn Climate Conference, EU and USA kept blocking the discussion on the subject of finance, the $100 billion promise was also up for discussion but the conference ended without any significant progress on this matter. At Bonn the Standing Committee on Finance also presented its Developing County Needs Report which puts the number at $5 Trillion to $11Trillion for developing countries’ needs. 

All the signatories to the Paris Climate Agreement agree that mostly developed countries are responsible for a major portion of carbon emissions and therefore should be paying for the loss and damage done to extremely poor countries or countries which have been severely  hit by climate change related crises. Developed countries have also agreed to help developing countries through aid, loans and sharing of technology. The USA has promised 11 billion every year by 2024, the EU has promised an additional $5 billion by 2027. Upper middle income countries like Saudi Arabia and China are also paying small countries although they are not under any obligation. 

Putting a price on decarbonizing  the whole planet is a complex task,  even harder is ensuring accountability. Countries keep failing and finding ways to evade protocols and laws. After the Russia- Ukraine conflict, Europe itself is looking at coal to get it through the cold winter that’s approaching, similarly India at COP26 used ‘phasing-down’ of coal instead of ‘phasing out’. At the same time countries are seeing erosion of habitable areas because of sea level rise, respiratory diseases due to pollution, extreme weather situations  and biodiversity loss due to climate change, and the world is still stuck in the bureaucratic mess over finance and accountability. At the COP26 Indian diplomat spoke on behalf of the BASIC group that represents India, Brazil, South Africa and China. She said meeting climate goals “requires significantly enhanced climate finance”, she further added “This is a simple ask from many developing countries, yet what we are getting is more workshops and in-session seminars to discuss the new goal,”