Though the dramatic post COP26 tensions over the wording of the final agreement on coal phase down are fading over time, the November 2021 meetings in Glasgow may still be remembered in of our journey away from carbon dependency for other reasons. Unless rapid action is taken over the coming months, COP26 may be marked as the point at which the Global South gave up trying to trust the promises of developed countries on climate financing.
In Glasgow, it became clear that the Paris commitment to $100 billion a year in aid to build climate resilience from developed countries by 2020, was never going to materialize, and the need for adaptation financing is estimated by UN the Environmental Programme to be five times current levels.
EU as a mediator between industrialized and developing countries
If the trust gap between developing and developed countries that emerges from this reality is not addressed, the prospects for COP27 in Sharm El Sheikh and beyond look bleak. The fragile consensus around the COP process could disintegrate altogether if the economies that industrialized earlier and faster do not accept that it is unjust for them not to support the countries that are suffering the consequences of their unrestricted use of fossil fuels over the past decades.
But with deep political divisions over climate action in the US and the size of Joe Biden’s Build Back Better bill, as well as its decarbonization measures facing a rough ride through the Senate, it seems unlikely that leadership will come from Washington to unblock this situation. Unfortunately, with a strong sense in Brussels and other major EU capitals, that Europeans have already contributed far more than their partners on the other side of the Atlantic in climate financing.
Still, the EU may be able to lead us away from a hardening of tensions between developed and developing countries over this issue. But it requires both a broader understanding of what climate support means and a more interest-based narrative.
Intellectual property rights in green technologies: no monopolization
The rapid development and deployment of a wide range of zero-carbon technologies and supporting infrastructure are crucial to climate change mitigation. This is particularly true in the Global South. Rich countries – and particularly those who are ahead in building up tech capacity – will only impede global development if they monopolize the intellectual property rights of green technology while applying carbon border adjustments. In contrast, swift and effective deployment of such technologies globally would strengthen efforts to mitigate climate change overall, as well as bringing economic dividends to the countries that develop them.
A climate leadership strategy that the EU could choose to follow at this delicate moment, therefore, is to build green tech capacity in partnership with the Global South. This should include incurring the development costs of some technologies. And it could help to accelerate its green transition in a manner that meets its own infrastructure needs, at the same time as building green tech industries in the Global South. Although there is fierce global competition over green technologies, European companies still play leading roles in areas such as the wind power industry, as well as hydrogen and electrical grid technologies – including electric vehicle charging technology.
At the same time, we should not be blind to our interdependence. The EU is reliant for both raw materials and innovation and capacities on its relationships with third countries. So, research, development, and industrial policies that encourage the development of low-carbon technologies in the Global South are win-win for both the EU in its own decarbonization, as well as for the economic development- and their own transition away from carbon – in partner countries.
New fund for co-investment and dissemination of green technologies
The recently announced EU Global Gateway initiative holds promise as a credible green alternative to China’s Belt and Road initiative, but it needs to be properly financed, including initiatives such as increasing the European Investment Bank’s capital. The EU should increase its investment in co-innovation programs and ensure that green technologies developed with public support are available to those that do not own their intellectual property.
To this end, the EU could create a Co-innovation and Green Technology Diffusion Fund, financed partly through the Global Europe program and partly by income from the EU’s Emissions Trading System and the Carbon Border Adjustment Mechanism (CBAM). But an additional focus in efforts should be to leverage private finance in this field. The EU could also work to break the deadlock in multilateral negotiations on green technology transfers by taking a more constructive approach to intellectual property rights at the WTO.
Building green tech partnerships cannot, of course, replace the climate finance question, but it can go some way to re-finding the goodwill that was lost in Glasgow and putting developed economies’ credibility in climate negotiations, back on course with the Global South. Since it will also support Europe’s own decarbonization and allow European companies to remain competitive as their dependencies shift, it seems a strategy worth pursuing with vigor.