Images from Israel and the Gaza Strip keep the whole world on edge. The war could also mean severe setbacks for climate diplomacy. The geopolitical fronts currently forming in and around Gaza do not bode well for the climate negotiations. Bernhard Pötter explains why.
But we also look at all the other current key climate issues: While the EU spoke out against the use of the controversial CCS technology in the energy system on Monday, the United Arab Emirates, India and the USA are backing CO2 capture and storage. But CCS will hardly contribute to reducing emissions by 2030 due to numerous technological and economic hurdles, as Nico Beckert shows.
We also look back at the World Bank meeting and the reforms that have been initiated. We spoke with climate finance expert Rishikesh Bhandary about how the World Bank needs to fill its new vision with substance. With a profile of presidential candidate Javier Milei, we also look at Argentina ahead of the elections next Sunday. Milei is considered the Argentinean Trump and has a realistic chance of winning the election – hardly good news for climate policy.
We will stay tuned for you.
Diplomats and climate politicians fear the escalating war between Israel and the Palestinian organization Hamas in the Gaza Strip could jeopardize the upcoming climate negotiations. Observers say that with thousands of people dead from Hamas terrorist attacks and Israeli retaliatory strikes in the Gaza Strip, the conditions for reaching an agreement at the COP28 in Dubai in December are deteriorating significantly. There is also apparently talk of postponing or canceling the conference should the situation escalate further.
Various factors could negatively influence the COP:
Russia did not exercise its blocking powers at last year’s COP27 in Sharm el-Sheikh. However, the Ukraine war has hit hard in the search for a host for COP29 in 2024: The Eastern Europe group, whose turn it actually is to choose a host, has so far failed to reach an agreement. Russia prevents the EU country Bulgaria, and the candidates Armenia and Azerbaijan probably also drop out because of their conflict. So far, there is no host for the COP29.
Late Monday evening this week, another front emerged for the next climate conference in Dubai in late November: The position of the EU countries for COP28 abandoned the use of CCS technology in the energy sector. They now aim for an “energy sector predominantly free of fossil fuels well before 2050.”
However, the COP presidency, the United Arab Emirates (UAE), relies on Carbon Capture and Storage (CCS) to continue producing and selling oil and gas. The oil and gas countries only want to “phase out emissions,” as COP President Sultan Al Jaber emphasizes. India, the United States and other countries are also building on CCS. However, as the International Energy Agency writes, the technology has not fulfilled expectations in the past.
According to the latest IEA calculations, to achieve net zero by 2050, emissions from the energy sector must fall by 35 percent by 2030 and 65 percent by 2035 compared to 2022. However, CCS technology, i.e., carbon capture in coal- and gas-fired power plants, will only be able to make a very minor contribution to reducing emissions in this short period. Numerous technological and economic hurdles prevent the large-scale use of the technology.
The IEA says that by 2030, CCS plants capable of capturing 1 billion tons of CO2 per year would have to be installed worldwide. At present, however, the annual capacity is only 50 million tons. IEA forecasts indicate that if all planned projects are implemented, around 400 million tons of CO2 could be captured by 2030.
Although numerous CCS projects have been announced in the past, very few of them have actually been realized. Despite a downward correction from a 2021 model, the IEA forecasts still seem very optimistic. The think tank BloombergNEF also writes that “the world’s capacity for carbon capture is not being deployed fast enough to meet climate goals at the end of the decade.”
Although CCS technology has been buzzing through the debates for decades, only 30 CCS plants are currently in operation worldwide. Around 70 percent of them are used to clean CO2 from natural gas so that it can be sold at all. Worldwide, only three CCS plants are in operation at power plants, as a database of the industry-affiliated Global CCS Institute shows.
The technological hurdles for using CCS in power plants are so high that almost 90 percent of all planned projects have failed or been shut down prematurely since 2000. This is shown in a study by the Institute for Energy Economics and Financial Analysis (IEEFA). The problems are far-reaching:
The technological challenges render the technology expensive. Economically, CCS does not yet pay off. Because there are other problems:
In the debates surrounding COP on the future of energy systems, the IEEFA believes that the accelerated expansion of renewables has clear advantages over CCS technology: Compared to “renewables and storage solutions, CCS is not competitive in the energy sector,” according to IEEFA’s assessment.
At its annual meeting in Marrakech, the World Bank gave itself a new mission. Ending poverty on a livable planet. Are these just words, or is there more to them?
The World Bank’s refreshed mission reflects the need to pay contextualize development efforts in the wider global policy challenges that are shaping poverty reduction efforts. Whether it be the impacts of climate change, biodiversity loss or pandemics, development programs will need to incorporate these broader policy challenges to ensure that progress is durable. The real test for the World Bank will be in how it translates this mission into projects, programs and operations that will facilitate structural transformations in emerging markets and developing economies so that they can achieve sustainable prosperity.
To what extent will the reforms agreed in Marrakech raise more money for the fight against climate change and its impacts?
Multilateral development banks play an instrumental role in mobilizing climate finance. Over the course of this year, the World Bank has been laying out how it intends to stretch its balance sheet so that it can supply more finance. The reforms that have been agreed upon so far mark a major step forward but there needs to be far greater ambition to ensure that the climate finance needs can actually be met. Furthermore, the focus in Marrakesh was primarily on the World Bank and the IMF, however, it is also equally important for other multilateral development banks to do their part in implementing reforms to increase their financing. More attention also needs to be paid to how national-level institutions can be supported to help accelerate the transition towards low-carbon development.
How important is Germany’s contribution of additional hybrid capital for increasing the financial capacity of the bank?
Germany’s contribution of hybrid capital helps to boost the World Bank’s lending. Hopefully, it will encourage others to also subscribe to hybrid capital as well. Increasing hybrid capital will help to increase the World Bank’s lending however measures like this need to be complemented by fresh injections of new capital.
What was the biggest success in Marrakech, and what is still missing?
The Marrakech meeting was an important milestone in the World Bank’s evolution process. The second phase of the evolution process will involve operationalizing many decisions by World Bank management and the board but it also requires members to make important political decisions on further bolstering the capabilities of the World Bank.
Furthermore, there has to be a stronger common understanding of the seriousness and urgency of debt distress. By not tackling debt distress, countries will not be able to make the investments that they require to achieve their development and climate change goals. As many have said, the debt crisis is a development crisis, and it’s important for the international community to ensure that the international financial architecture, especially pertaining to sovereign debt restructuring, is fit for purpose.
Why are the World Bank and IMF so important to solving the climate crisis? Are they at all, or are the countries’ efforts more important?
Countries’ efforts need the support of development finance institutions like the World Bank. Multilateral development banks are uniquely able to provide long-term, affordable finance to help countries make the climate investments that they need. Over time, MDBs have also acquired significant expertise and are able to bolster national efforts.
The IMF has an important role to play in helping countries facing macroeconomic imbalances to lay the groundwork for longer-term transformations. More broadly, as the Songwe-Stern-Bhattacharya report has clearly laid out, countries need a mix of domestic and international resources to achieve their development and climate change goals.
What are the next steps now?
One of the most important steps that the World Bank management needs to take is to articulate a plan for a general capital increase so that the World Bank members can support the bank with a fresh new injection of money.
While the balance sheet optimization measures will help to unlock more finance, to truly scale up finance and ensure that the World Bank is able to provide finance on concessional terms to climate-vulnerable countries, a general capital increase is needed.
Similarly, the World Bank’s efforts to integrate a debt pause on new loans for small states is laudable. However, this should be scaled up so that existing loans also come with a debt pause feature and a much broader range of countries can take advantage of the debt pause feature.
Rishikesh Ram Bhandary is the Assistant Director of the Global Economic Governance Initiative at the Boston University Global Development Policy Center and an expert on climate finance and international climate negotiations. His research focuses on how developing countries mobilize finance from various international sources.
Last week, the World Bank adopted new goals and measures at its annual meeting to better align poverty reduction with climate action. The importance of reducing CO2 emissions, including in poorer countries, is illustrated by this World Bank statistic: Global warming can only be limited to 1.5 degrees if middle- and low-income countries also reduce their CO2 emissions instead of increasing them.
The data shows: It will not be enough if only countries with statistically high incomes (above about 13,800 dollars annually per capita) bring their emissions close to zero. The countries with upper-middle incomes (about 4,000 to 13,000 dollars), such as China, Russia, South Africa or Brazil, must also reduce their emissions significantly. And even lower middle-income countries like India, Nigeria, Bangladesh or Bolivia (1,000 to 4,000 dollars) cannot continue to increase their emissions as planned if the global emissions budget for 1.5 degrees is to be met. Even the poorest countries (up to about 1,000 dollars) would still have to roughly halve their CO2 emissions by 2050 to achieve this goal, according to World Bank data. bpo
To meet climate targets, investment in power grids must double to 600 billion US dollars annually through 2030. This is the conclusion of a new report by the International Energy Agency (IEA). Consequently, the IEA warns that power grids are already a bottleneck in the energy transition. While investments in renewable energies have almost doubled since 2010, investments in power grids have remained relatively constant at 300 billion US dollars in recent years. It expressed concern that developing and emerging countries, except China, have shown a decline in investment.
Failing to increase investment fast enough and implement regulatory reforms “will result in slower growth of renewables, higher fossil fuel use and stronger global warming,” said Fatih Birol, Executive Director of the IEA. According to the organization’s calculations, slower progress could still leave energy sector emissions at more than eight gigatons in 2050, instead of dropping to just over three gigatons.
The IEA warns that planning and building new grid infrastructure often takes between 5 and 15 years. Renewable energies can be developed much faster (one to five years). This could lead to an even greater imbalance between grid expansion and the expansion of renewables. Grid expansion is needed to meet the higher demand for electricity for applications caused by uses such as EVs, electric heating and air conditioning, or hydrogen production. According to the IEA, 80 million kilometers of power grids will need to be built or modernized by 2040. That is equivalent to the length of the current electricity grids installed worldwide. nib
A climate ranking published today by Greenpeace East Asia gives many carmakers a poor grade. The majority of cars sold still have internal combustion engines. In addition, many automakers have made little progress in decarbonizing their supply chains and using resources more economically. None of the world’s 15 largest car companies have “made adequate commitments to reduce emissions from production and materials,” the environmental organization criticizes. The high steel consumption of the auto industry contributed significantly to emissions and is often neglected by companies.
Toyota, Suzuki and the Chinese company Great Wall Motor score lowest in the Greenpeace ranking. Only 1 in 400 new cars from Toyota is electric. Suzuki did not sell a single EV in 2022. While Mercedes-Benz and BMW still score best, Greenpeace criticizes that the schedules for phasing out internal combustion vehicles are not ambitious enough. Volkswagen also ranks 6th out of 15. Although Chinese manufacturer SAIC has the largest share of EVs among new cars sold (31 percent), it is doing enough to reduce emissions in the supply chain. The company is ranked 3rd by Greenpeace.
Worldwide, the 15 largest carmakers still have sold 55.5 million internal combustion vehicles in 2022. This compares to just 3.3 million EVs, Greenpeace criticizes. The organization demands, for instance, that carmakers calculate and publish the carbon footprint of the materials they use. Furthermore, they should invest in the production of CO2-free steel and produce fewer SUVs. nib
The climate crisis continues to intensify worldwide: 2023 saw a series of temperature records in the atmosphere and oceans, as well as extreme ice loss in Antarctica. The series of unusual extreme weather events reached a sad peak in Libya – 11,000 people lost their lives and 43,000 their homes to heavy rainfall. Those hit particularly hard are the poorest and most vulnerable in developing countries – those who are least responsible for the climate crisis.
However, the main culprits of the climate crisis have so far shown a lack of financial support for dealing with loss and damage. The decision to set up a loss and damage fund at COP27 was a historic milestone after several developed countries had blocked the fund for many years. At COP28 in Dubai, the fund must now be made operable and filled adequately. Those who want to work with vulnerable countries to achieve constructive results for renewable energies, energy efficiency and the downscaling of coal, oil and gas must deliver here. The failure of developed countries to deliver on their pledge to mobilize 100 billion US dollars in climate finance every year from 2020 has tarnished the trust of developing countries. Progress on the fund is the glue needed to restore that trust. If the negotiations around the fund fail, COP28 also risks failing on other key issues.
This week (October 17-20), the transition committee is meeting to negotiate the details of the fund’s structure, in which Germany also has a seat. Here, answers to highly political questions must be found before COP28.
The most important questions are: Who pays into the fund? Here, the industrialized countries must take the lead. Their emissions mean they bear the main historical responsibility for the climate crisis. The fund was adopted by the parties to the Framework Convention on Climate Change and the Paris Climate Agreement. The principles of common but differentiated responsibilities and polluter pays apply.
However, these principles mean that wealthy emerging economies – especially the oil and gas countries – must now also contribute to climate financing. The host country of COP28, the United Arab Emirates, could break the ice here and play a pioneering role. Financial contributions to address damage and loss must be reliably provided through grants, in addition to existing development cooperation and climate finance funds.
To cover the extreme financial needs of developing countries in dealing with damage and losses – estimates put the amount at up to 580 billion US dollars from 2030 – additional funds must also be mobilized. These include innovative financial instruments such as a tax on international shipping and payments from carbon majors – the 100 largest oil, gas and coal companies, which together account for 70 percent of global emissions.
Which countries are eligible to draw money from the fund? According to the proposal of developed countries, only least developed countries and small island states should have access to the fund. However, it would be unacceptable if, for example, countries such as Libya and Pakistan, which have suffered massive damage and losses, did not meet the fund’s eligibility criteria. The most vulnerable people and communities must be at the core of the fund, and the money must reach them.
Where should the fund be set up? While developing countries want to set up the fund under the umbrella of the Framework Convention on Climate Change, developed countries advocate a solution via the World Bank, i.e., outside the Convention. It is essential that the fund – as the centerpiece of the financial architecture on loss and damage – is geared to the needs of the most vulnerable and provides them with direct access. The fund should operate under the principles of the Framework Convention on Climate Change and the Paris Climate Agreement, which means, for example: Developed and developing countries must make equal decisions. The World Bank does not meet these criteria. For this reason, the World Bank can act as a trustee, but the fund must be set up autonomously and independently.
What should the fund cover? The financial gaps in dealing with damage and loss are huge, even though an additional mosaic of support mechanisms, some of which already exist, such as the Global Shield, has been launched. Therefore, the new fund must support comprehensive, self-directed and prioritized solutions by affected countries for economic and non-economic loss and damage. Clarifying these issues is essential to make the fund capable of acting – but an empty Fund is of no use to anyone. It is therefore also crucial to adequately fill the fund very soon – if possible already at COP28. Germany and other developed countries need to prepare their contributions now.
Laura Schäfer is Senior Adviser Climate Risk Management at Germanwatch and Coordinator for Foreign Climate Policy and the G7. Vera Künzel works as Senior Advisor Climate Change Adaptation and Human Rights at the environment and development NGO.
“We are not going to adhere to the 2030 agenda,” said Javier Milei during the second TV debate of Argentina’s presidential candidates on Oct. 9. The ultra-liberal economist calls the UN’s 17 development goals an expression of “cultural Marxism.” According to Milei, the market should decide on climate action. He is a hardliner on environmental and climate issues. At a business conference, he said, “A company can pollute the river as much as it wants. Where is the harm? Where is the problem?”
Argentina will elect its new president next Sunday (Oct. 22). In addition to Milei, Sergio Massa of the Union por la Patria party and Patricia Bullrich of Juntos por el Cambio have a chance of winning the election. Milei is running for the Libertad Avanza party. He is currently leading in the polls.
Milei’s victory in the August primaries came as a surprise. His success is also due to the political failure of previous governments and Argentina’s ongoing economic crisis. Inflation is rising with each passing year and currently stands at nearly 140 percent. In addition, the national budget shows a huge gaping hole. And as if that were not enough, agriculture – traditionally an important economic sector – is experiencing a historic drought.
Climate change plays only a minor role in the election campaign in these times of crisis. The candidates of the largest parties promise to get the country out of the crisis with economic growth. If Europe demands green hydrogen, huge wind farms will be built. If fossil energies such as gas and oil bring foreign currency, pipelines or liquid gas terminals will be built. At the Gulf of San Matías on the Patagonian coast, preparations are already underway for the country’s largest crude oil export terminal. To make this project possible, the government of the responsible province amended a law that prohibited oil projects in this bay. Indigenous communities, in particular, protest the projects. But the projects are entirely in Milei’s interests. He wants to override an emergency law that protects indigenous people from displacement and resettlement.
Javier Milei’s logo is a roaring lion’s head. He likes to portray himself as a rebel. “I didn’t enter politics to lead lambs. I came to awaken lions,” is his campaign slogan. During campaign appearances, he even raises a chainsaw at times. It stands for his plan to slash government to a minimum. This also includes climate policy. Milei plans to close eleven ministries, including the Ministry of Environment and Sustainable Development, responsible for Argentina’s 2030 climate strategy.
Javier Milei is a political outsider – even though he has been a member of parliament since 2021. With his rants about the political “parasitic caste,” he strikes a chord with a young generation that has grown up under inflation and lost faith in politics. He grew up in Buenos Aires in the 1970s as the son of a bus driver and transport operator and a housewife, and later studied economics. He then worked as a lecturer and, most recently, was employed by Eduardo Eurnekián, one of the world’s largest airport operators and, according to Forbes, is the fourth-richest man in Argentina. In 2020, Milei announced that he would for presidency.
Besides libertarian economic policy, Milei repeatedly advocates positions ranging from ultraconservative to right-wing social policy. His demeanor is reminiscent of former US President Donald Trump: Both come from the business world, became famous on TV shows, defend guns and consider private property sacrosanct. But unlike Trump, who focused on closing off the US economy, Milei wants a radical opening. If Milei wins the election, climate action in Argentina would face years of standstill. Lisa Pausch from Mendoza/Argentina
Images from Israel and the Gaza Strip keep the whole world on edge. The war could also mean severe setbacks for climate diplomacy. The geopolitical fronts currently forming in and around Gaza do not bode well for the climate negotiations. Bernhard Pötter explains why.
But we also look at all the other current key climate issues: While the EU spoke out against the use of the controversial CCS technology in the energy system on Monday, the United Arab Emirates, India and the USA are backing CO2 capture and storage. But CCS will hardly contribute to reducing emissions by 2030 due to numerous technological and economic hurdles, as Nico Beckert shows.
We also look back at the World Bank meeting and the reforms that have been initiated. We spoke with climate finance expert Rishikesh Bhandary about how the World Bank needs to fill its new vision with substance. With a profile of presidential candidate Javier Milei, we also look at Argentina ahead of the elections next Sunday. Milei is considered the Argentinean Trump and has a realistic chance of winning the election – hardly good news for climate policy.
We will stay tuned for you.
Diplomats and climate politicians fear the escalating war between Israel and the Palestinian organization Hamas in the Gaza Strip could jeopardize the upcoming climate negotiations. Observers say that with thousands of people dead from Hamas terrorist attacks and Israeli retaliatory strikes in the Gaza Strip, the conditions for reaching an agreement at the COP28 in Dubai in December are deteriorating significantly. There is also apparently talk of postponing or canceling the conference should the situation escalate further.
Various factors could negatively influence the COP:
Russia did not exercise its blocking powers at last year’s COP27 in Sharm el-Sheikh. However, the Ukraine war has hit hard in the search for a host for COP29 in 2024: The Eastern Europe group, whose turn it actually is to choose a host, has so far failed to reach an agreement. Russia prevents the EU country Bulgaria, and the candidates Armenia and Azerbaijan probably also drop out because of their conflict. So far, there is no host for the COP29.
Late Monday evening this week, another front emerged for the next climate conference in Dubai in late November: The position of the EU countries for COP28 abandoned the use of CCS technology in the energy sector. They now aim for an “energy sector predominantly free of fossil fuels well before 2050.”
However, the COP presidency, the United Arab Emirates (UAE), relies on Carbon Capture and Storage (CCS) to continue producing and selling oil and gas. The oil and gas countries only want to “phase out emissions,” as COP President Sultan Al Jaber emphasizes. India, the United States and other countries are also building on CCS. However, as the International Energy Agency writes, the technology has not fulfilled expectations in the past.
According to the latest IEA calculations, to achieve net zero by 2050, emissions from the energy sector must fall by 35 percent by 2030 and 65 percent by 2035 compared to 2022. However, CCS technology, i.e., carbon capture in coal- and gas-fired power plants, will only be able to make a very minor contribution to reducing emissions in this short period. Numerous technological and economic hurdles prevent the large-scale use of the technology.
The IEA says that by 2030, CCS plants capable of capturing 1 billion tons of CO2 per year would have to be installed worldwide. At present, however, the annual capacity is only 50 million tons. IEA forecasts indicate that if all planned projects are implemented, around 400 million tons of CO2 could be captured by 2030.
Although numerous CCS projects have been announced in the past, very few of them have actually been realized. Despite a downward correction from a 2021 model, the IEA forecasts still seem very optimistic. The think tank BloombergNEF also writes that “the world’s capacity for carbon capture is not being deployed fast enough to meet climate goals at the end of the decade.”
Although CCS technology has been buzzing through the debates for decades, only 30 CCS plants are currently in operation worldwide. Around 70 percent of them are used to clean CO2 from natural gas so that it can be sold at all. Worldwide, only three CCS plants are in operation at power plants, as a database of the industry-affiliated Global CCS Institute shows.
The technological hurdles for using CCS in power plants are so high that almost 90 percent of all planned projects have failed or been shut down prematurely since 2000. This is shown in a study by the Institute for Energy Economics and Financial Analysis (IEEFA). The problems are far-reaching:
The technological challenges render the technology expensive. Economically, CCS does not yet pay off. Because there are other problems:
In the debates surrounding COP on the future of energy systems, the IEEFA believes that the accelerated expansion of renewables has clear advantages over CCS technology: Compared to “renewables and storage solutions, CCS is not competitive in the energy sector,” according to IEEFA’s assessment.
At its annual meeting in Marrakech, the World Bank gave itself a new mission. Ending poverty on a livable planet. Are these just words, or is there more to them?
The World Bank’s refreshed mission reflects the need to pay contextualize development efforts in the wider global policy challenges that are shaping poverty reduction efforts. Whether it be the impacts of climate change, biodiversity loss or pandemics, development programs will need to incorporate these broader policy challenges to ensure that progress is durable. The real test for the World Bank will be in how it translates this mission into projects, programs and operations that will facilitate structural transformations in emerging markets and developing economies so that they can achieve sustainable prosperity.
To what extent will the reforms agreed in Marrakech raise more money for the fight against climate change and its impacts?
Multilateral development banks play an instrumental role in mobilizing climate finance. Over the course of this year, the World Bank has been laying out how it intends to stretch its balance sheet so that it can supply more finance. The reforms that have been agreed upon so far mark a major step forward but there needs to be far greater ambition to ensure that the climate finance needs can actually be met. Furthermore, the focus in Marrakesh was primarily on the World Bank and the IMF, however, it is also equally important for other multilateral development banks to do their part in implementing reforms to increase their financing. More attention also needs to be paid to how national-level institutions can be supported to help accelerate the transition towards low-carbon development.
How important is Germany’s contribution of additional hybrid capital for increasing the financial capacity of the bank?
Germany’s contribution of hybrid capital helps to boost the World Bank’s lending. Hopefully, it will encourage others to also subscribe to hybrid capital as well. Increasing hybrid capital will help to increase the World Bank’s lending however measures like this need to be complemented by fresh injections of new capital.
What was the biggest success in Marrakech, and what is still missing?
The Marrakech meeting was an important milestone in the World Bank’s evolution process. The second phase of the evolution process will involve operationalizing many decisions by World Bank management and the board but it also requires members to make important political decisions on further bolstering the capabilities of the World Bank.
Furthermore, there has to be a stronger common understanding of the seriousness and urgency of debt distress. By not tackling debt distress, countries will not be able to make the investments that they require to achieve their development and climate change goals. As many have said, the debt crisis is a development crisis, and it’s important for the international community to ensure that the international financial architecture, especially pertaining to sovereign debt restructuring, is fit for purpose.
Why are the World Bank and IMF so important to solving the climate crisis? Are they at all, or are the countries’ efforts more important?
Countries’ efforts need the support of development finance institutions like the World Bank. Multilateral development banks are uniquely able to provide long-term, affordable finance to help countries make the climate investments that they need. Over time, MDBs have also acquired significant expertise and are able to bolster national efforts.
The IMF has an important role to play in helping countries facing macroeconomic imbalances to lay the groundwork for longer-term transformations. More broadly, as the Songwe-Stern-Bhattacharya report has clearly laid out, countries need a mix of domestic and international resources to achieve their development and climate change goals.
What are the next steps now?
One of the most important steps that the World Bank management needs to take is to articulate a plan for a general capital increase so that the World Bank members can support the bank with a fresh new injection of money.
While the balance sheet optimization measures will help to unlock more finance, to truly scale up finance and ensure that the World Bank is able to provide finance on concessional terms to climate-vulnerable countries, a general capital increase is needed.
Similarly, the World Bank’s efforts to integrate a debt pause on new loans for small states is laudable. However, this should be scaled up so that existing loans also come with a debt pause feature and a much broader range of countries can take advantage of the debt pause feature.
Rishikesh Ram Bhandary is the Assistant Director of the Global Economic Governance Initiative at the Boston University Global Development Policy Center and an expert on climate finance and international climate negotiations. His research focuses on how developing countries mobilize finance from various international sources.
Last week, the World Bank adopted new goals and measures at its annual meeting to better align poverty reduction with climate action. The importance of reducing CO2 emissions, including in poorer countries, is illustrated by this World Bank statistic: Global warming can only be limited to 1.5 degrees if middle- and low-income countries also reduce their CO2 emissions instead of increasing them.
The data shows: It will not be enough if only countries with statistically high incomes (above about 13,800 dollars annually per capita) bring their emissions close to zero. The countries with upper-middle incomes (about 4,000 to 13,000 dollars), such as China, Russia, South Africa or Brazil, must also reduce their emissions significantly. And even lower middle-income countries like India, Nigeria, Bangladesh or Bolivia (1,000 to 4,000 dollars) cannot continue to increase their emissions as planned if the global emissions budget for 1.5 degrees is to be met. Even the poorest countries (up to about 1,000 dollars) would still have to roughly halve their CO2 emissions by 2050 to achieve this goal, according to World Bank data. bpo
To meet climate targets, investment in power grids must double to 600 billion US dollars annually through 2030. This is the conclusion of a new report by the International Energy Agency (IEA). Consequently, the IEA warns that power grids are already a bottleneck in the energy transition. While investments in renewable energies have almost doubled since 2010, investments in power grids have remained relatively constant at 300 billion US dollars in recent years. It expressed concern that developing and emerging countries, except China, have shown a decline in investment.
Failing to increase investment fast enough and implement regulatory reforms “will result in slower growth of renewables, higher fossil fuel use and stronger global warming,” said Fatih Birol, Executive Director of the IEA. According to the organization’s calculations, slower progress could still leave energy sector emissions at more than eight gigatons in 2050, instead of dropping to just over three gigatons.
The IEA warns that planning and building new grid infrastructure often takes between 5 and 15 years. Renewable energies can be developed much faster (one to five years). This could lead to an even greater imbalance between grid expansion and the expansion of renewables. Grid expansion is needed to meet the higher demand for electricity for applications caused by uses such as EVs, electric heating and air conditioning, or hydrogen production. According to the IEA, 80 million kilometers of power grids will need to be built or modernized by 2040. That is equivalent to the length of the current electricity grids installed worldwide. nib
A climate ranking published today by Greenpeace East Asia gives many carmakers a poor grade. The majority of cars sold still have internal combustion engines. In addition, many automakers have made little progress in decarbonizing their supply chains and using resources more economically. None of the world’s 15 largest car companies have “made adequate commitments to reduce emissions from production and materials,” the environmental organization criticizes. The high steel consumption of the auto industry contributed significantly to emissions and is often neglected by companies.
Toyota, Suzuki and the Chinese company Great Wall Motor score lowest in the Greenpeace ranking. Only 1 in 400 new cars from Toyota is electric. Suzuki did not sell a single EV in 2022. While Mercedes-Benz and BMW still score best, Greenpeace criticizes that the schedules for phasing out internal combustion vehicles are not ambitious enough. Volkswagen also ranks 6th out of 15. Although Chinese manufacturer SAIC has the largest share of EVs among new cars sold (31 percent), it is doing enough to reduce emissions in the supply chain. The company is ranked 3rd by Greenpeace.
Worldwide, the 15 largest carmakers still have sold 55.5 million internal combustion vehicles in 2022. This compares to just 3.3 million EVs, Greenpeace criticizes. The organization demands, for instance, that carmakers calculate and publish the carbon footprint of the materials they use. Furthermore, they should invest in the production of CO2-free steel and produce fewer SUVs. nib
The climate crisis continues to intensify worldwide: 2023 saw a series of temperature records in the atmosphere and oceans, as well as extreme ice loss in Antarctica. The series of unusual extreme weather events reached a sad peak in Libya – 11,000 people lost their lives and 43,000 their homes to heavy rainfall. Those hit particularly hard are the poorest and most vulnerable in developing countries – those who are least responsible for the climate crisis.
However, the main culprits of the climate crisis have so far shown a lack of financial support for dealing with loss and damage. The decision to set up a loss and damage fund at COP27 was a historic milestone after several developed countries had blocked the fund for many years. At COP28 in Dubai, the fund must now be made operable and filled adequately. Those who want to work with vulnerable countries to achieve constructive results for renewable energies, energy efficiency and the downscaling of coal, oil and gas must deliver here. The failure of developed countries to deliver on their pledge to mobilize 100 billion US dollars in climate finance every year from 2020 has tarnished the trust of developing countries. Progress on the fund is the glue needed to restore that trust. If the negotiations around the fund fail, COP28 also risks failing on other key issues.
This week (October 17-20), the transition committee is meeting to negotiate the details of the fund’s structure, in which Germany also has a seat. Here, answers to highly political questions must be found before COP28.
The most important questions are: Who pays into the fund? Here, the industrialized countries must take the lead. Their emissions mean they bear the main historical responsibility for the climate crisis. The fund was adopted by the parties to the Framework Convention on Climate Change and the Paris Climate Agreement. The principles of common but differentiated responsibilities and polluter pays apply.
However, these principles mean that wealthy emerging economies – especially the oil and gas countries – must now also contribute to climate financing. The host country of COP28, the United Arab Emirates, could break the ice here and play a pioneering role. Financial contributions to address damage and loss must be reliably provided through grants, in addition to existing development cooperation and climate finance funds.
To cover the extreme financial needs of developing countries in dealing with damage and losses – estimates put the amount at up to 580 billion US dollars from 2030 – additional funds must also be mobilized. These include innovative financial instruments such as a tax on international shipping and payments from carbon majors – the 100 largest oil, gas and coal companies, which together account for 70 percent of global emissions.
Which countries are eligible to draw money from the fund? According to the proposal of developed countries, only least developed countries and small island states should have access to the fund. However, it would be unacceptable if, for example, countries such as Libya and Pakistan, which have suffered massive damage and losses, did not meet the fund’s eligibility criteria. The most vulnerable people and communities must be at the core of the fund, and the money must reach them.
Where should the fund be set up? While developing countries want to set up the fund under the umbrella of the Framework Convention on Climate Change, developed countries advocate a solution via the World Bank, i.e., outside the Convention. It is essential that the fund – as the centerpiece of the financial architecture on loss and damage – is geared to the needs of the most vulnerable and provides them with direct access. The fund should operate under the principles of the Framework Convention on Climate Change and the Paris Climate Agreement, which means, for example: Developed and developing countries must make equal decisions. The World Bank does not meet these criteria. For this reason, the World Bank can act as a trustee, but the fund must be set up autonomously and independently.
What should the fund cover? The financial gaps in dealing with damage and loss are huge, even though an additional mosaic of support mechanisms, some of which already exist, such as the Global Shield, has been launched. Therefore, the new fund must support comprehensive, self-directed and prioritized solutions by affected countries for economic and non-economic loss and damage. Clarifying these issues is essential to make the fund capable of acting – but an empty Fund is of no use to anyone. It is therefore also crucial to adequately fill the fund very soon – if possible already at COP28. Germany and other developed countries need to prepare their contributions now.
Laura Schäfer is Senior Adviser Climate Risk Management at Germanwatch and Coordinator for Foreign Climate Policy and the G7. Vera Künzel works as Senior Advisor Climate Change Adaptation and Human Rights at the environment and development NGO.
“We are not going to adhere to the 2030 agenda,” said Javier Milei during the second TV debate of Argentina’s presidential candidates on Oct. 9. The ultra-liberal economist calls the UN’s 17 development goals an expression of “cultural Marxism.” According to Milei, the market should decide on climate action. He is a hardliner on environmental and climate issues. At a business conference, he said, “A company can pollute the river as much as it wants. Where is the harm? Where is the problem?”
Argentina will elect its new president next Sunday (Oct. 22). In addition to Milei, Sergio Massa of the Union por la Patria party and Patricia Bullrich of Juntos por el Cambio have a chance of winning the election. Milei is running for the Libertad Avanza party. He is currently leading in the polls.
Milei’s victory in the August primaries came as a surprise. His success is also due to the political failure of previous governments and Argentina’s ongoing economic crisis. Inflation is rising with each passing year and currently stands at nearly 140 percent. In addition, the national budget shows a huge gaping hole. And as if that were not enough, agriculture – traditionally an important economic sector – is experiencing a historic drought.
Climate change plays only a minor role in the election campaign in these times of crisis. The candidates of the largest parties promise to get the country out of the crisis with economic growth. If Europe demands green hydrogen, huge wind farms will be built. If fossil energies such as gas and oil bring foreign currency, pipelines or liquid gas terminals will be built. At the Gulf of San Matías on the Patagonian coast, preparations are already underway for the country’s largest crude oil export terminal. To make this project possible, the government of the responsible province amended a law that prohibited oil projects in this bay. Indigenous communities, in particular, protest the projects. But the projects are entirely in Milei’s interests. He wants to override an emergency law that protects indigenous people from displacement and resettlement.
Javier Milei’s logo is a roaring lion’s head. He likes to portray himself as a rebel. “I didn’t enter politics to lead lambs. I came to awaken lions,” is his campaign slogan. During campaign appearances, he even raises a chainsaw at times. It stands for his plan to slash government to a minimum. This also includes climate policy. Milei plans to close eleven ministries, including the Ministry of Environment and Sustainable Development, responsible for Argentina’s 2030 climate strategy.
Javier Milei is a political outsider – even though he has been a member of parliament since 2021. With his rants about the political “parasitic caste,” he strikes a chord with a young generation that has grown up under inflation and lost faith in politics. He grew up in Buenos Aires in the 1970s as the son of a bus driver and transport operator and a housewife, and later studied economics. He then worked as a lecturer and, most recently, was employed by Eduardo Eurnekián, one of the world’s largest airport operators and, according to Forbes, is the fourth-richest man in Argentina. In 2020, Milei announced that he would for presidency.
Besides libertarian economic policy, Milei repeatedly advocates positions ranging from ultraconservative to right-wing social policy. His demeanor is reminiscent of former US President Donald Trump: Both come from the business world, became famous on TV shows, defend guns and consider private property sacrosanct. But unlike Trump, who focused on closing off the US economy, Milei wants a radical opening. If Milei wins the election, climate action in Argentina would face years of standstill. Lisa Pausch from Mendoza/Argentina
