Abu Dhabi, UAETuesday 14 July 2020

To tackle climate change, developing countries have to get on board

Emerging economies need to be treated as partners for real progress be made in curbing global emissions

Emissions rise from a coal-fired power station in Mpumalanga, South Africa, operated by power utility Eskom. The company is struggling under a mountain of debt and does not generate enough cash to service it. Waldo Swiegers / Bloomberg
Emissions rise from a coal-fired power station in Mpumalanga, South Africa, operated by power utility Eskom. The company is struggling under a mountain of debt and does not generate enough cash to service it. Waldo Swiegers / Bloomberg

With temperatures and sea levels rising, frequent bushfires and flooding around the world, the urgency to tackle climate change is clear. Which is why the failure of the Madrid COP25 summit last month was even more disappointing. Countries could not agree a more robust, international carbon trading system and funding for carbon reduction in the developing world. Another year that the world could not afford to waste was lost.

A new coal-fired power plant comes up every week in Asia where annual CO2 emissions are double those of the US and triple those of Europe

One of the problems at the summit was that the interests of Western countries seemed misaligned with those of emerging economies. While much of the climate change narrative today is focused on what Western economies are doing to reduce emissions – such as pledging carbon neutrality by 2050 – Asia and Africa are increasing their emissions and consumption of energy.

A new coal-fired power plant comes up every week in Asia where annual CO2 emissions are double those of the US and triple those of Europe, according to the International Energy Agency. China and India now account for 37 per cent of world CO2 emissions, pushing world emissions up again over the past two years, after several years of decline.

But per capita emissions offer a different picture: Chinese emissions per capita amount to half those of the US, while India’s per capita emissions barely reach a tenth of the US. Some African countries are as low as a hundredth. Therein lies the fundamental challenge in reducing global emissions: how do we solve the global problem, while acknowledging the inequality of emissions as well as income?

From the perspective of the developing world, the West’s pleas to eschew an energy intensive path to development smacks of hypocrisy, especially when the US and Europe together account for the majority of past emissions across human history. So does advice to use less energy or fly less, when over a billion people in Asia and Africa still live without electricity and 80 per cent of the world is yet to ride on an airplane.

In a world of trade wars and rising economic nationalism, achievements in curbing emissions can be made only when developing countries are treated as partners rather than targets for Western policy.

In particular, their need for affordable and secure supply of energy must be addressed. Some of the West’s policies have actually been counterproductive by creating financial incentives for South America and Asia to accelerate deforestation to grow and sell biofuels for western consumption, enabling the West to meet its own targets but increasing net global emissions.

In this regard a global carbon pricing system, whether through a world carbon bank or otherwise, is a vital policy option to give developing countries the incentives and support to switch to lower carbon-emitting fuels. Holistic global policies are needed that focus on reduction of emissions, without arbitrarily ruling out any fuels, technologies or policy solutions that may help to reach the targets of the Paris Agreement.

Renewable energy from solar and wind has an important part to play but despite hundreds of billions invested annually, solar and wind supply a mere 2 per cent of the world’s energy consumption.

Electric cars are excellent at reducing emissions in the city, but if the electricity that powers them still comes from coal, which it does the majority of the time in China and India and still over a third of the time even in Germany, then they will be worse for climate change than cars that run on petrol.

There are those who would like to put all fossil fuels in the same bucket and condemn them equally. But natural gas generates electricity with less than half the CO2 emissions of coal, and without the harmful particulates. It presents an immediate cleaner substitute for coal-fired power and is an enabler of intermittent renewable energy.

This approach of gas-complementing renewables has led to the US achieving its lowest emissions in a generation, and the UK the lowest in over a century. According to the IEA, natural gas substituting for coal-fired electricity in the past five years has reduced global CO2 emissions by 100 times more than all the electric cars in the world – equivalent to half of all the world’s cars converting to clean, electric energy overnight.

Oil consumption is also often misunderstood. Its growth in demand today is not from cars, but firstly, from petrochemicals, upon which we rely for so much of modern life: from smartphones and electric devices, to household items and medications. Thereafter, demand growth is from trucking, air transport and shipping, for which there is no viable renewable option today. Oil demand is expected to peak sometime mid-century, but under any future demand scenario, oil and gas will still be required to be a significant part of the energy mix.

Vilifying the entire oil and gas sector and trying to starve it of Western capital will lead to higher energy prices and more burning of coal in the developing world, a self-defeating approach if we truly care about reducing global emissions in an unbiased manner.

The challenge to the global community is to create the necessary incentives and assurances to accelerate the developing world’s switch away from coal to more gas and renewables in countries like China and India that have few gas resources and where coal is still cheaper, absent a financial incentive.

Ultimately, the only truly clean energy is using less of it. The developing world needs more support to increase energy efficiency and reduce the carbon intensity of economic growth. Preserving and replanting forests must take a more central role. A recent study found that simply by reforesting land in developing countries the world could create a sink for 750 billion CO2, amounting to 100 years of current global carbon emissions from transportation.

Climate change is a global challenge that requires a concerted global effort. A Western-centric approach or piecemeal efforts at the national level will not suffice. Concrete international mechanisms with clear financial incentives are urgently needed to enable growing economies to reduce energy consumption through efficiency, reduce emissions by switching to less carbon intensive fuels, and reforest the global carbon sinks that are so central to human life.

Majid Jafar is chief executive of Crescent Petroleum and a steward of the global system for energy and materials at the World Economic Forum

Updated: January 20, 2020 02:19 PM

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