Even as the global North pushes for a decarbonised regime, will it fulfill its commitments and hand-hold the South by giving it funds to transition away from fossil fuels?
By Sanjay Raman Sinha
In a major breakthrough, ministers from nearly 200 countries agreed to ink a deal that calls for a transition away from fossil fuels. The 28th Conference of Parties (COP28), which concluded in Dubai on December 13, reached some significant and far-reaching decisions.
COP28 is United Nations’ annual climate change conference. Under its aegis, world leaders, ministers and negotiators meet to address the issues of climate change. The participants are signatories to the UN Framework Convention on Climate Change, the Kyoto Protocol and the Paris Agreement. Other stakeholders such as civil society, the private sector and international organisations also participate.
After two weeks of hard-nosed bargaining, the summit’s UAE presidency said on social media: “With an unprecedented reference to transitioning away from all fossil fuels, the UAE Consensus is delivering a paradigm shift that has the potential to redefine our economies.”
The deal draft highlighted the achievement by mentioning the “accelerating efforts towards the phase-down of unabated coal power” and for “tripling renewable energy capacity globally and doubling the global average annual rate of energy efficiency improvements by 2030”.
It was not lost to many that the pact didn’t spell out the full phase-out of hydrocarbons. This means that mining and use of oil, gas and coal will continue till the proposals are in place at the ground level. Total elimination of fossil fuels has been on the agenda of environmental diplomacy of developed countries for some time now. The developing South has always resisted the demand of doing away with fossil fuels as concomitant funds and technology were not made available to them. This has been the single most contention between the North and the South. This time, the Dubai deliberations broke the ice like never before.
Last year’s COP had set up a Loss and Damage Fund for poor countries, but the real exercise of deciding on a realistic workable target for contributions from developed nations was left to later negotiations. Now in a major breakthrough, this Fund was formalised this year with funding undertakings totalling $792 million. This is the working fund pool which will help the South migrate away from fossil fuels.
However, this is not the only endowment which developing countries have gained from the deliberations. Two types of technologies have also been promised to transmigrate from fossil fuels.
Carbon capture is a one such technology. This involves capturing fossil fuel emissions at the source and storing them permanently underground. The catch is that this technology is expensive and is yet to be a proven panacea. This technology has been the target of environmental activists who say it is a decoy to justify continued drilling.
Another technology, the acceleration of low-carbon hydrogen, is also expensive.
However, as the migration technology is not within easy reach or of proven capability, it is a moot question how the shift will be done. The long-standing demand of technology transfer is a chimera and if the deal is done for a shift away from fossil fuels, then effective technology needs to be given.
The area of concern is that carbon emissions continue to rise. The COP28 agreement had made a case for parties to focus on the goal of tripling renewable energy globally by 2030. It is manifestly a North agenda, but India has led other concerned developing economies to argue for a not strict-baseline of 2030, but a flexible time frame tailored according their specific conditions.
Phasing out fossil fuels is part of a broader energy package which includes scaling up renewable energy and improving energy efficiency. The COP agreement on a renewable energy target was an important step forward from the G20 Leaders’ Summit in September 2023 where it was decided to triple renewable energy capacity globally. Now the developing world’s economy will shift gears to be in sync with the decarbonisation mode.
A report by the Institute for Energy Economics and Financial Analysis has said that replacing natural gas consumption with biogas and biomethane to 20% by 2030 can help India cut liquefied natural gas import bills by $29 billion.
COP28’s official statement by India’s Union Minister for Environment, Forest and Climate Change Bhupender Yadav said: “India has successfully reduced the emission intensity vis-à-vis its GDP by 33% between 2005 and 2019, thus achieving the initial NDC target for 2030, 11 years ahead of the scheduled time. India has also achieved 40% of electric installed capacity through non fossil fuel sources, nine years ahead of the target for 2030”. Clearly India is on track with the decarbonisation process.
Importantly, the energy sector accounts for around 75% of greenhouse gas emissions and is critical in controlling its effect. Replacing coal, gas, and oil-fired power with renewable energy sources greatly reduces CO2 emissions. India has taken significant strides in this direction and stands 4th globally in renewable energy installed capacity. For a place in the decarbonised world, India will have to develop forward and backward industry linkages as well. The phase-in to a clean-air regime can spell economic opportunities for India and it should poise its policies to gain maximum advantage.
However, globally, real-world decarbonisation will require support from all industries, and finance and investment strategies will have to change. Sustainable growth has to be put on track on the basis of clean energy. That will need changed business models and investment patterns. Much global support will be needed. Realpolitik has to accommodate the harsh realities and necessities of global warming and make leeway for funds and technology to work its way through developing nations on easy terms.
In fact, COP28 has seen a series of announcements aimed at facilitating the use of carbon credits for promoting decarbonisation. These have to be dove-tailed effectively with development and economic policies in the transition phase. A certain amount of hand holding may be needed from developed nations and that implies good intentions and goodwill.
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