Climate Debate: Yours, Mine & Ours

“Yours, Mine and Ours” has been an essential part in diplomacy and business deals. However, there are a few areas where this may not be the right approach. Climate talk is one such example.

?Often when the world gets into a bind that requires global cooperation, a nation first seeks majority opinion within its own parliament, then reaches out to like-minded nations for their support, before seeking global consensus. In other words, the national verdict is “sold” amongst friendly clusters (settling for some dilution) and then this “cluster pact” is negotiated with all others. It is rooted in the democratic process which begins first within one’s own national interest.

This approach has been used for over 75 years in managing global conflicts, WTO issues, and financial crisis. While this approach works well within a nation and its friendly cluster (G10, NATO, BRICS, LATAM, GCC), it often pits one cluster against another (North-South Divide, G10 vs. BRICS) and ignores the views of other nations that are not part of any cluster. Even the United Nations and its agencies have become victims to this process and are seldom able to provide equitable outcomes based on real needs.

This “Yours, Mine and Ours” approach drives a hasty crystallization (often appearing as negotiations). The true test of its weakness came during the recent Covid pandemic. But for the fact that the four covid waves hit each country differently (differing rates and mortality) and subsided quickly, the outcome of such an approach could have been a global catastrophe.

A similar problem now exists with climate talks which began as a shared vision (COP21, Paris, 2015), to save the planet from a 1.5 deg C temperature rise. It had voluntary national targets to reduce GHG emissions, increase renewable energy in the grid and fund emerging nations in this transition ($100 billion/year). Since then, it has steadily slid backwards to become a “Yours, Mine and Ours” debate, with missed G10 targets and failure to meet any funding commitments. The recent COP29 (Baku, Azerbaijan) meeting this year failed to even muster a meaningful joint resolution.? Next year’s COP30 (Belem, Brazil) may not have an effective US participation at the table.

There are many reasons for this reversal in G10 commitments i.e. slow post Covid economic recovery, global conflicts, inflationary pressures, rising unemployment, all causing right-wing shifts in domestic politics. However, the resulting “Yours, Mine & Ours” stand has widened the rift between the North-South and the BRICS-G10 clusters. With disproportionately higher domestic GDP investments by China and India in GHG reductions and renewable energy additions since 2015 and now followed up by Brazil and South Africa, the pull back by the G10 is being viewed as a cop-out. The recent sentiments (post 2024 US election result) appear to reverse all commitments made by USA thus far. Any increase in fossil fuel use and its exploration does not bode well for climate change discussions.

Key issues in the degradation of climate talks have principally centered around (1) the lack of financial commitment by the G10 towards helping developing nations in this transition; (2) lack of progressive voluntary commitment to GHG emission reductions; and (3) commitment to transition away from fossil fuels (COP28, UAE, 2023). The question is that if poorer nations are stepping up their climate investments on their own, why can’t the G10 countries? There are several reasons for this dilemma:

1.????? Financial reconciliation: Global fossil energy assets are US$ 2.5 trillion (3% of global GDP). Clean energy investments are projected at US$ 1.0 trillion (1.2% global GDP). Government “unproductive” debt globally stands at US$ 15 trillion (17% global GDP). Many governments own fossil energy assets and so stranding them is a financial issue.

?2.????? Technical Time-horizon: There is much work to be done on clean energy road maps. For example, (1) Hydrogen supply chain development and mass scale adoption; (2) adopting wide spread e-mobility; (3) enabling dispatchable RE by using energy storage; and (4) reshaping T&D utilities to manage DERs.

?The standoff between BRICS and the G10 in the recent COP29 meeting was a new low in climate talks. Next year (2025) is also the reporting period for earlier committed Nationally Determined Contributions (NDC) to voluntary GHG reductions at COP21 (2015) and the announcement of new NDC targets going forward for the next 10 years. Should the G10 NDCs reporting/new targets at COP30 (2025) fall short, the BRICS-G10 rift will likely be beyond mend in trusting one another. Should this happen, my view is that the following two scenarios will likely unfold:

1.????? BRICS chart their own climate destiny – with their own revised GHG targets and increased renewables investments duly helped by China’s production capability (solar PV, electric vehicles, hybrid inverters and LFP batteries) and India/Brazil’s large EPC capabilities in this area. Through frugal innovation, technology sharing, concessional pricing and priority allotments, the large markets of Brazil, India, Africa and Middle East can be sustained.

?2.????? BRICS chart their own fuel strategy - collectively leveraging domestic fuel pool (coal, oil, gas), and adding biomass/biogas, to reduce expensive dollar denominated O&G fuel imports. Energy growth is essential for economic growth, albeit resulting in increased GHG emissions. Even with the resultant increased GHG emissions, it would still be far less than the West, on a per capita basis.

?The above two scenarios are an eyeball-to-eyeball standoff with the G10, with the biggest opportunity losers being Japan, EU countries, UK, Australia and Canada who are dependent on fossil fuel exports and/or renewable energy technology exports in their trade diversification strategy. The Nordic countries have already built a portfolio of biomass/biogas value-chain technologies over the years. Only the USA, given its large domestic energy consumption/production, would be relatively unaffected.

The recent setbacks in talks are of concern. Due to slow progress, it is estimated the temperature rise will likely be around 2.5 deg C (not 1.5 deg C). On the other hand, more global natural disaster events are being attributed to climate change with huge costs to the local society and their continued livelihood. Local population affected by such repeated events are beginning to drive electoral politics for local solutions. This will weaken national policy coherence and dent the very national consensus theory outlined at the very opening!

All this can be avoided if nations acknowledge that in climate change, we are all in this together (and together we succeed). Let’s hope COP30 in 2025 is more like COP21 and that nations agree that climate issues are “ours”, and not “yours, mine and ours”.