EDITORIAL: Once again the “net zero” lobby is bubbling with ambition ahead of the UN Climate Change Conference (COP29) in November, this time announcing a $1 billion Climate Finance Action Fund (CFAF) – to be “capitalised with contributions from fossil fuel producing countries and companies across oil, gas and coal”; with Azerbaijan a founding contributor. It’s meant to be a catalytic public-private partnership fund, which will mobilise the private sector and de-risk investment.
It will also contain special facilities with concessional and grant-based support to rapidly address the consequence of natural disasters in developing countries.
And it’s only one initiative within a package of 14 announced by the COP29 president-designate as part of the “action agenda to enhance ambition and enable action”.
Pakistan, one of the countries to suffer the most from climate change, would of course welcome such initiatives.
But we have also seen, only too often, the wide gap between the net zero lobby’s pledges and the actual aid that comes through when push comes to shove and natural disasters do strike. That’s why countries like Pakistan should be forgiven for taking some of these usual annual claims with a pinch of salt.
That’s not to say these initiatives are not profoundly important. In fact, once the Kyoto Protocol ran its course the UN is the only body that’s constantly hashing out progressive ideas to meet the challenge of climate change.
CFAF, too, is a forward-looking, finance-driven idea to bind the biggest emitters into a fund, and invest all proceeds into the fund itself to pursue long-term benchmarks and at the same time create enough fiscal space to meet sudden disasters, especially in the poorest countries that – again, just like Pakistan – suffer deaths and billions in losses for no fault of theirs.
These counties have neither the money nor the capability to meet such challenges.
But when they go begging for aid, the lobby promises a lot of action, especially financial help, but does not follow through. So, the UN’s decision to go for such a fund shows that it appreciates the problem and is trying to find solutions that will work.
Rich countries, also the biggest guilty parties when it comes to climate degradation, might not cough up the cash desperately needed for emergencies, but some of them must still be credited for going the extra mile to cut emissions.
In fact, much of Europe would have been well on the road to net zero emissions if the Covid recession and subsequent high interest rate environment didn’t suddenly make such ambitions unfeasible and unaffordable.
And, since geopolitics trumps idealism in the real world, ongoing conflicts and trade disruption and the constant threat of a wider war in the Middle East spiking oil prices will keep most states from diverting too much money towards climate change for a while.
Yet the world will still need some kind of fund that steps up when disaster strikes.
Pakistan, for example, is once again on the edge of monsoon season, with national and provincial disaster management authorities once again warning of the kind of rains and floods that wreak havoc here every other year now.
A $1bn fund, even if it gets going, is going to be too little, even if we consider just Pakistan’s experience with annual rain, flash floods, as well as droughts. But it’s a start.
The idea is to get more and more countries to commit hard cash to the cause. So far, despite all the talk and warnings, this element has been missing.
The UN has the outreach to get the ball rolling, no doubt, but the proof of the pudding will lie in the eating.
A lot of things will become a lot clearer in November, especially how many countries are really willing to put money where they know and say it is desperately needed.
Copyright Business Recorder, 2024
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