Developing countries will suffer the most from accelerating climate change, and even if China is excluded from the calculation, by 2030 they are likely to be responsible for more than half of the world’s annual greenhouse gas (GHG) emissions. sufficiently focused on a range of development, adaptation and resilience priorities, as well as the constraints these countries face in meeting the global emission reduction imperative.
In an effort to help shift the global policy framework towards the most important perspectives of the developing countries themselves, we recently published an edited volume, Keys to Climate Action: How Developing Countries Can Drive Global Success and Local Prosperity. This volume presents a wide range of eminent authors as country case studies (on Bangladesh, Egypt, India, Indonesia, Nigeriaetc South Africa) and broader geographic estimates (by East Africa, Africa generally, Latin America and the CaribbeanAnd V20 group of vulnerable countries), in addition to assessing the comprehensive financial difficulties.
Together, these studies describe how climate change hinders development efforts at the local level and also opens up new opportunities. They draw attention to the vital importance of enhancing the role of developing countries in managing global climate action. They also offer key messages on diverse and evolving issues that need to be taken into account when considering relevant issues.
Range of circumstances
Developing countries should not be seen as a monolithic group. They have different, albeit overlapping, interests given their circumstances. Small islands, for example, have temporarily responded to natural disasters by borrowing to rebuild and protect the livelihoods of their citizens, but as the scale and intensity of climate change accelerates, their financial flexibility is rapidly eroding.
Other countries remain concerned that the transition to an energy transition will hamper their overall economic growth and hard-won progress on food security, education, health and other elements of sustainable development. The political economy of moving to a low-carbon economy can be daunting. vested interests in the coal and fossil fuel industries can be strong. The geographic imbalance between winners and losers complicates the politics of change.
However, case studies show that attitudes and official positions are changing. There is a new understanding that a comprehensive climate and development agenda can both accelerate development and reduce greenhouse gas emissions if implemented on a large scale. Investment and innovation in adaptation, resilience, nature and mitigation can be in the national interest of every country if it stimulates economic growth while providing cheaper and more inclusive access to modern energy. This strategy avoids the world’s trade tariff penalties with carbon tax adjustments. This raises concerns about new opportunities for developing countries to provide loans that can be traded in voluntary and compliance-based carbon markets in advanced economies. This may allow them to participate in new technologies such as green hydrogen.
Domestic Policy Challenges
Seizing these opportunities requires strong institutions and robust national policy systems. Governments at the national and subnational levels must manage the “here and now” costs that are already hurting their people and economies, and orchestrate and deliver a comprehensive energy transition. This transition is surprisingly difficult. In addition to innovation in new technologies, transitions must be designed and viewed through the lens of equity—between countries, between geographical regions within countries, between workers, between generations, and between gender differences.
Global Funding trial
The case studies also draw attention to the huge problem of finance, which we call the “broken thread” of the international system.
The case studies also draw attention to the huge problem of finance, which we call the “broken thread” of the international system. Most developing countries have to rely on international funding to replenish their own resources, but there are too few of them. There is not enough concessional funding, which is critical to cover losses and damages, to cover the costs of a just transition, and to adapt when projects do not generate direct income. Who has enough non-concessional state finances there. Private finance plays an important role, but it can be too expensive and unstable for many of the necessary investments.
Recent detailed climate finance needs assessments suggest that emerging markets and developing countries other than China will need to increase climate spending to around $2.4 trillion a year by 2030, more than four times the current level, of which $1 trillion will need to come from external sources. This is an order of magnitude larger than the original commitment made by advanced economies in Copenhagen in 2009 to provide $100 billion in additional climate finance for developing countries by 2020, a promise that has yet to be delivered. The bottom-up case studies in our volume confirm major gaps in the global financial architecture and gaps in the process of coordinating funding from various sources.
All of this is leading to a prominent role for multilateral development banks (MDBs) and development finance more broadly. MDBs could help countries develop and implement ambitious climate and sustainable development strategies, address policy and institutional gaps that hinder increased investment, mobilize more affordable private capital, increase own financing to meet critical public investment needs, and help countries coordinate multiple stakeholders. parties within the agreed vision and strategy. To do all this, they would have turned into a completely different organization than they are today.
Four Key Ingredients of Progress
What can be done to make progress on such a large, important and complex set of global challenges? In our review chapter For the volume, we highlight four key components that will help you achieve successful actions and results.
- Developing countries must help set the international agenda. Developing countries need to join forces to meet their international “requirements” not only for adaptation and resilience, in which they are increasingly successful, but also for mitigation, in which self-interest differences often still prevail. This is important to overcome gaps in understanding in international climate and development negotiations of the major priorities facing developing countries in formulating and implementing integrated climate and development strategies. For example, an advanced economy perspective narrowly focused on mitigation is not conducive to creating accountability for climate change action in developing countries, which are processes in which climate and development are on different negotiating paths.
- Country planning and consensus building are fundamental. Developing countries need to work hard to identify long-term strategies and projects to address their own complex climate change and development challenges. They require civic participation processes that could form the basis for building broad public support for the new strategy. Just Energy Transition Partnerships, described in some of the case studies in our volume, provide insight into how to map and navigate relevant political economy issues, even if they are still under development.
- Funding is essential. Several types of funding need to be scaled up, with the mix depending on the country and project type. Rich countries must double their commitment to climate finance by 2025 and make it more efficient, while the international community must seize every opportunity to increase the availability of low-cost financing. Interest rates and maturities, the uncertainty of terms and the ability of developing countries to access disparate sources of finance must be taken into account. The case studies provided several targeted ideas for actions that could be taken. Reform of the multilateral development bank system is a constantly hot topic.
- Focus on building trust. Developing countries can put pressure on advanced economies to take active steps to restore confidence in international cooperation. This is important both for strengthening political cooperation and for reducing technical risks. Strategies for accelerating climate change and economic development have two important features that are common across countries. In the short term, they carry more risk due to additional financial risks, but they benefit more when everyone is moving in the same direction. If everyone trusts others to do their part, the risk of being a “first mover” can be reduced. For their part, developing countries can help restore the spirit of global solutions to global problems by refining their ambitions for what they will undertake with more support from the international community.
As useful as this edited volume has been, Keys to Climate Action represents only one event aimed at raising the prospects of developing countries in advancing a new benchmark for central global issues of climate and development. Further efforts are needed to clarify and advance relevant issues ahead of major events such as the G-20 summits (hosted by India in 2023 and Brazil in 2024), the COP28 climate summit (hosted by the United Arab Emirates in 2023). ) and around growing calls for reform of the World Bank and related institutions. With a constant rush of collective energy and attention, emerging ideas and institutional innovations can help usher in a new era of ubiquitous prosperity for all.