Cop28: how to fight climate change when we don’t even have a commander?

Global warming cannot be met by anything other than a coordinated global response, but logic stands little chance against politics and nationalism, as seen at Cop28
We are entering an existential battle against climate change with no clear idea of how much it’s going to cost, who’s going to pay and who’s in charge

Anthony Rowley

Published: 4:30pm, 9 Dec 2023

Why you can trust SCMP

Whether we care about the battle against climate change, we are all going to have to help pay for it – either directly through higher taxes or indirectly through having part of our savings and investment diverted to the fight.

As things are, we pay taxes and then assume we’ve done our bit in battling global warming but much of the money we invest (or which is invested on our behalf) in stock markets will also need to be diverted to the fight.

This is one of the two inconvenient truths that need to be factored into the debate about climate change for it to become serious. The other is that nations need to sacrifice some sovereignty to achieve a climate rescue.

How can a universal challenge such as global warming possibly be met by anything other than a coordinated global response? The logical answer is that it can’t, but logic stands little chance against politics and nationalism.

Unfortunately, such critical factors were largely ignored or obscured in the torrent of words and reports flowing from the Cop28 United Nations climate change meeting in Dubai, which has had more of a commercial than conference-like atmosphere.

It would be comical, were it not potentially tragic, that we are entering an existential battle – that’s not too strong a term – against climate change with no clear idea of how much it’s going to cost, who’s going to pay and who’s in charge.

It’s a fearsomely complex battle, requiring strong and clear leadership, which is precisely what it lacks. Yet how can we win the battle when everyone has their own ideas on how to fight it and there is no commander in the field?

Some urged in Dubai that we ban fossil fuels without regard for the economic and social consequences. Cop28 president Sultan Ahmed al-Jaber advocated a more balanced approach but was scorned as a champion of oil culture.

Some argued that solar energy, hydropower and other such renewables are the way to go while others countered that there is not enough renewable energy available or the power grids to distribute their output. Yet others pushed hydrogen power or co-firing ammonia at coal power plants.

Nuclear power was firmly back in contention too but detractors claimed it was too dangerous and costly. Carbon taxes and carbon capture battled for attention while cutting methane emissions was also in vogue.

07:25

Cop28 prepares temperature check on climate at Dubai meeting

All the while, global warming marched on, seemingly confident of its ultimate victory against the divided and largely ineffective forces ranged against it. No one asked how we can resolve this confusion.

It’s assumed that the major powers that spend much of their time now in a state of near-war are able to declare a truce to face what is, for now, the limited front of climate change and to cooperate in the interests of humanity.

In reality, it is more likely that they will do so only when global warming assumes the dimensions of a risk greater even than that of nuclear conflagration. Both are man-made threats to mankind, the Earth and the environment.

The competitive, rather that cooperative, approach that characterises our way of dealing with climate change is nowhere more apparent than in the area of finance. A lack of realism prevails, as Dubai yet again demonstrated.

Cop28: War on climate change must transcend all other conflicts

How can we possibly have a realistic assessment of how much the fight against global warming is going to cost if we lack a global authority to discuss and decide upon which of the many approaches to the problem is best?

Just what is involved in the battle is rarely, if ever, set out clearly for the benefit of the people (ourselves) who are going to have to finance it. This suggests the issue has not been properly thought through by national leaders.

Most people agree that coal and oil-fired electric power plants will need to be phased down or phased out. But who is going to pay for that? Most agree that solar and wind are needed but who will pay for distribution grids?

03:37

Iceland power plant stops greenhouse gas by turning carbon dioxide into rock

Many want to see mechanisms installed to capture carbon from power generation at source and to store it. But who will front the huge investment needed, and who will finance the use of hydrogen and ammonia – and so on.

It is easy to cry “ban all fossil fuels” and “a plague on all their houses” about oil companies and coal producers but much harder to devise realistic ways in which a clean and green revolution can be brought about in the real world.

Supposing that we (meaning the world’s major powers) were able to set aside national differences and set up even an ad hoc global authority to decide and price the best way to counter climate change, how do they finance it?

ESG (environmental, social and corporate governance) investing and the United Nations’ Sustainable Development Goals will not cut it, nor will the hollow promise of the Glasgow Financial Alliance for Net Zero (GFANZ) to put up big money. We are talking multitrillion, not multibillion, sums.

How multilateral development banks can free up billions of dollars

Such sums can only come from our savings, which are entrusted to pension funds, insurance companies, mutual funds and the like, and invested in stock markets. But that will require new listed investment vehicles dedicated to financing the climate change fight.

Either that or having multilateral development banks, such as the World Bank and regional development banks, issue securities into which savings can be directed. Whichever way, the world needs to get real and serious about the climate issue.

Anthony Rowley is a veteran journalist specialising in Asian economic and financial affairs