TThe International Energy Agency (IEA) made a clear statement in 2021: if we want to restrict global heating to below 1.5C, we cannot develop new fossil fuel resources. This threshold marks the point beyond which the most catastrophic climate impacts occur. However, the oil and gas industry seems to be disregarding this message. Despite its outrageous profits of $4tn, it committed half a trillion dollars for new drilling and extraction. This business as usual approach will have devastating consequences for life on Earth.
Energy is a crucial factor for development and meeting basic needs. However, the current methods of producing energy from coal, oil, and gas are the very cause of the climate emergency. It is evident that the issues of climate, energy, and development are interconnected and must be addressed accordingly. This becomes even more challenging in a post-Covid context where poor nations are burdened with record levels of debt. Following the Ukraine invasion, rising interest rates have led to a surge in the dollar, making loan repayments, often denominated in US currency, more costly. African nations are forced to allocate up to five times their health budgets to meet debt obligations.
The French president, Emmanuel Macron, deserves recognition for hosting a summit that seeks to reimagine financial solutions for combating poverty, reducing planet-destroying emissions, and protecting nature. However, there is still a long way to go. Although the International Monetary Fund announced that rich countries had met their target of a $100bn climate fund for poor countries, set in 2019, it may not be as significant as it seems. When compared to the trillions of dollars instantly mobilized to bail out finance houses in 2008, the efforts to address global heating appear inadequate.
Mia Mottley, the prime minister of Barbados, rightly criticized the rich world for prioritizing profits over saving lives during this “polycrisis moment.” Colombia’s president, Gustavo Petro, called for a global financial transaction tax, while Kenya’s president, William Ruto, endorsed the “Just Transition” report, highlighting Africa’s potential for renewable energy. Nonetheless, the continent has struggled to industrialize and harness its vast green power potential.
Leaders in North America and Europe are focused on reshaping their energy systems, yet the key materials required are found in the developing world. Even China, which dominates critical rare earth elements, lacks vital metals. This presents an opportunity for a grand bargain, where poorer countries are given policy space to address their structural deficiencies in food and energy sovereignty, as well as low value-added manufacturing, in exchange for sharing their mineral resources. Otherwise, Latin America, Africa, and Asia run the risk of becoming targets of a new scramble for resources, with clean energy companies behaving as destructively as fossil fuel firms. It is crucial that the funds, debt relief, and access to Western markets needed by developing nations do not contribute to extractive capitalism.
Mr. Ruto suggested that we should be able to design replacements for the current “Bretton Woods” financial institutions in the span of three weeks. This may seem ambitious, but as Martin Luther King Jr. warned, we must avoid the “tranquillising drug of gradualism.” Urgent action is needed now to prevent an environmental disaster.
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