Countdown to Climate Catastrophe
Jamaica, Rwanda, the Marshall Islands, and Mongolia are among the world’s most climate-vulnerable countries, and account for just a small percentage of global emissions. This year, their economies have also been affected by the COVID-19 pandemic. Yet every one of these countries delivered updated climate plans to the United Nations, as set out in the 2015 Paris climate agreement, before the deadline at the end of this year.
In other words, countries that have contributed the least to the climate crisis are now among the most committed to resolving it. This should set an example for developed countries, including the United States, whose emission-reduction plans – due by midnight on December 31 – have not yet materialized.
In addition to climate plans, the Paris agreement calls for financial aid from richer countries to support climate action. To date, this support – also due by the end of 2020 – is lacking as well. The OECD estimates that only around $79 billion of the promised $100 billion annually is being delivered to the countries where it is needed most.
Vulnerable countries are already feeling the financial impact of climate change. According to the UN, climate vulnerability raised the cost of debt for such countries by more than $60 billion over the past decade. Interest payments are expected to balloon to $168 billion in the coming decade, for the same reason. The most at-risk economies require an immediate injection of liquidity, along with debt restructuring and forgiveness.
Now, COVID-19 is compounding these economic woes, and it is clear that the pandemic will not be the last of its kind. After all, climate change, deforestation, and the destruction of natural habitats increase the risk of new vector-borne diseases.
Advanced economies are responsible for helping to ensure that the developing world is not left mired in debt and battered by the interconnected threats of COVID-19 and climate change. And, in addition to helping vulnerable countries, they need to reconsider their own COVID-19 recovery plans.
Unfortunately, that’s not happening. Trillions of dollars are being directed toward recovery packages that economists tell us reward sectors responsible for pollution. The International Monetary Fund’s 2020 World Economic Outlook also emphasizes the G20 countries’ responsibility to implement growth packages that reduce their reliance on fossil fuels. It is vital that governments understand that if we want to ensure a safer world for future generations, building back better and greener is not a policy just for the next year.
Vulnerable countries are tired of inaction. And they are not simply calling for help, but are committed to leading by example. The Central Bank of the Philippines, for example, recently adopted a sustainable-finance framework to safeguard the financial system from evolving climate risk. The new framework encourages banks to start pricing physical climate and transition risks, as well as valuing climate-resilience and low-carbon opportunities. Moreover, the central bank must disclose its own exposure to environmental risks, which could lead to excluding specific assets – like fossil fuels – from its policies in the future. In late October, the country also imposed a moratorium on new coal-fired power stations.
On a global scale, the World Bank and the IMF are collaborating with the G20 to attract more investment to poorer countries by lowering the costs associated with “green” projects. In the United States, President-elect Joe Biden has vowed to re-establish the US as a country committed to the UN, multilateral agreements such as the Paris accord, and international law. America’s return to a position of global leadership on combating climate change is to be welcomed. But, like other developed countries, the US still needs to deliver its updated climate plan.
The COVID-19 crisis underscores the urgent need for more ambitious measures. During World War I, the United Kingdom issued war bonds to finance both the conflict and the subsequent recovery. Similar instruments could be used to help the Global South claw its way out of both pandemic- and climate-related disaster. In addition, major development banks and private investors should demonstrate leadership by implementing the Paris agreement’s vision of a global investment shift from dirty to clean energy.
Climate action cannot be delayed any longer, and the leaders of developed economies need to step up and follow the example already being set by developing countries. Real leaders are not those who shout the loudest or tweet the most. Real leaders are those who deliver on their promises. We urge richer countries to submit updated climate plans before the end of the year, and to uphold the other promises made in the Paris climate agreement – both for our sake and that of future generations.
Ed.’s Note: Mohamed Nasheed, a former president of Maldives, is Speaker of the People’s Majlis (parliament). Loren Legarda, a former senator, is Deputy Speaker of the Philippines’ House of Representatives. The views expressed in the article do not necessarily reflect the views of The Reporter.
Contributed by Mohamed Nasheed and Loren Legarda