No finance? No fossil fuel phase-out | Opinion | Eco-Business

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The closing days of the COP28 UN climate negotiations have been heavily focused on language around phasing out fossil fuels. That we are having this conversation at all counts as a minor victory, given that the words “fossil fuels” did not even appear in any legal text in the UN climate process (UNFCCC) until only two years ago.

But this is not an easy matter. While developed countries – somewhat hypocritically, given that many of them are the largest fossil fuel producers and have the largest oil and gas expansion plans in the world – have been pushing for the fossil fuel phase-out language, many developing countries have been a bit more reticent. 

The Africa Group in its final-day press conference was quite explicit in its reasoning: fossil fuels are a source of badly needed revenues. If they must avoid extracting those fossil fuels, they need international support to replace those revenues and to transition into a different and more sustainable economic pathway.

Unfortunately, developing countries simply have no trust that rich countries will deliver the money they need for the energy transition. For decades, rich nations have failed to provide climate finance at the scale needed – or even the scale they themselves promised (i.e. the infamous US$100 billion per year by 2020).

Now, they are sowing further mistrust by trying to weaken any new language about climate finance across all the UNFCCC negotiating tracks. For example, the US successfully led a push to ensure that the language in the Governing Instrument of the new Loss and Damage Fund does not even mention developed countries as contributors at all, but merely says “The Fund is able to receive contributions from a wide variety of sources.”

Economic suicide

Simply put, developing countries have no belief that international finance will be made available. Without this assurance, many of them cannot commit to a fossil fuel phase-out, seeing this as economic and political suicide.

This fits into a broader context of a deeply unjust global economy. The international trade regime has denied developing countries the policy tools that developed countries used to grow their economies.

Developed countries must step forward and provide climate finance and technology transfer at a scale that does justice to the sweeping nature of the crisis unfolding at this very moment. So far, they have failed this challenge monumentally.

The intellectual property regime has denied developing countries many of the technologies developed countries have used to build their societies and maintain the health of their people. The international tax regime has denied developing countries the public revenues generated from the extractive activities of multinational corporations, overwhelmingly based in developed countries.

The international climate regime could flip the script. If properly implemented, the UNFCCC and the Paris Agreement can give developing countries the finance, technology, capacity building, and policy space for a transition to new, just and sustainable domestic economies, within the framework of a new, just and sustainable global economy. The UNFCCC could help developing countries leapfrog over the fossil-based economic development paradigm and into a new paradigm that is just, democratic and aligned with nature.

Unfortunately, if it tries to do this while failing to deliver on finance and technology, the UNFCCC would actually perpetuate existing global injustices. It would deny developing countries the pathway to economic growth used by developed countries, without offering any real alternative.

The entire raison d’etre of the UNFCCC is to create that alternative and make it realistic. But in order to do so, developed countries must step forward and provide climate finance and technology transfer at a scale that does justice to the sweeping nature of the crisis unfolding at this very moment. So far, they have failed this challenge monumentally.

This story was published with permission from Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, climate change, resilience, women’s rights, trafficking and property rights. Visit https://www.context.news/.

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