Smoke billows from an unauthorized steel factory, foreground, on November 4, 2016 in Inner Mongolia, China. To meet China’s targets to slash emissions of carbon dioxide, authorities are pushing to shut down privately owned steel, coal, and other high-polluting factories scattered across rural areas.
(Photo by Kevin Frayer/Getty Images)
Developing nations will require more than $1 trillion annually to achieve significant progress in climate transition, according to Mari Pangestu, a former World Bank official.
“The estimated cost is around $1 trillion to $3 trillion per year for developing countries to successfully transition,” she stated in an interview with CNBC’s “Squawk Box Asia,” emphasizing the lack of funding for emission reduction and clean energy adoption, which has caused tensions between developing and developed nations.
Pangestu, a former trade and tourism minister for Indonesia, highlighted the need for developed countries to recognize that the climate issue is inherently tied to development. She emphasized the importance of a successful transition from high-emission industries to clean energy, stating that it requires substantial resources.
The recently concluded Group of 20 climate ministers meeting in India showcased the lack of progress in addressing these challenges, further fueling the debate surrounding financing and cooperation between nations.
The G20 climate ministers meeting in July failed to reach a consensus on key issues, including financing for developing nations, as indicated by the official document.
Bhupender Yadav, India’s climate change minister and chair of the meeting, acknowledged the presence of challenges regarding energy and target-oriented issues.
Sharp criticism
The outcome of the July climate meeting, which preceded the G20 leaders’ meeting in September and the COP28 Summit in December, received harsh criticism from environmental activists.
Alex Scott of climate change think-tank E3G stated, “Europe and North Africa are burning, Asia is ravaged with floods yet G20 climate ministers have failed to agree on a shared direction to halt the climate crisis which is escalating day by day.” He further criticized Saudi Arabia and China for obstructing discussions and impeding the interests of developing countries.
China denied reports of obstructing climate discussions at the G20 meeting, stating that such claims are false. The Ministry of Foreign Affairs highlighted the positive outcomes of the meeting but acknowledged the introduction of geopolitical issues as an obstacle to reaching a communique.
‘Scale and urgency’
Pangestu emphasized the urgent need to address the scale of the climate crisis and stressed the importance of collective efforts from all stakeholders. She mentioned the involvement of countries’ own resources and multilateral development banks in reducing costs and risks to attract private sector investments.
Pangestu argued that if developed nations want developing countries to phase out fossil fuels and retire coal plants, they should provide support to compensate for the associated costs. She emphasized the need for comprehensive policies and reforms to address legal and financial challenges.
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