COP26 Climate Conference in Glasgow – Show Me the Money!

Contributed by Robert Lyman © 2021. Robert Lyman’s bio is here.

In the 1996 movie Jerry McGuire, football player Rod Tidwell has a single demand regarding what the agent must do to keep him as a client. He shouts, “Show me the money,” repeatedly in a line that made movie history.

In the lead-up to the 26th Conference of the Parties to the Framework Convention on Climate Change (“COP26″) in Glasgow this year, the developing countries have made exactly the same demand. If the developed countries, mostly of the Organization for Economic Cooperation and Development (OECD), want to achieve from the conference a global commitment to sharply reduce greenhouse gas (GHG) emissions before 2050, they will have to accommodate the non-OECD countries demands for money – lots of it.

In fact, in July 2021, a group of more than 100 developing countries published a plan that they characterized as “easy-to-measure” actions needed by the OECD countries with respect to financing climate mitigation and adaptation measures and providing reparations for the role of the developed countries in producing past GHG emissions. The document, entitled A Five-Point plan for Solidarity, Fairness and Prosperity, sets out actions they believe are needed in five areas:

• Cutting emissions consistent with attaining the UN’s 1.5 degree C. goal, “led by those with the biggest responsibility and capacity”
• Adaptation, with financial help to the most vulnerable
• Payment of reparations for loss and damage to the developing countries for the developed countries’ “historic failure to cut their emissions adequately”
• Increasing finance, including at least $100 billion per year up to 2024 and more thereafter
• Implementation of rules for transparency, carbon trading and common timeframes for accelerating action.

For the first part, cutting emissions, the plan selected five “rich” countries plus the European Union to commit to actions consistent with “fair shares accounting”. Fair shares accounting, according to the plan, allocates emissions cuts to countries based on their “historical responsibility and capacity to act”, as judged by the less developed countries. In many cases, application of this approach means that the richer countries should already have passed net zero emissions by 2030 and be absorbing more CO 2 from the atmosphere than they emit. Alternatively, this “duty” can be expressed as a combination of a national emission cut and a financial contribution to the developing world’s mitigation and adaptation efforts. According to the plan:

• The United States should commit to reduce emissions by 195% below 2005 levels by 2030. “This could comprise a 70% reduction in domestic emissions and a further 125% reduction achieved by providing finances to the developing countries in the order of $80 billion per year.” (This makes the April 2021 commitment by U.S. President Biden to increase climate aid to $5.7 billion annually by 2024 look rather paltry by comparison.)
• The EU should increase its 2030 mitigation target to at least 65% below 1990 levels and increase its annual climate aid to developing countries to $33-$36 billion.
• The United Kingdom should cut domestic emissions to at least 75% below 1990 levels by 2030, and provide annual climate aid averaging $46 billion (33 billion British pounds)
• Canada should increase its mitigation target to 140% below 2005 levels by 2030. This could comprise a reduction of at least 60% in domestic emissions along with climate aid of at least U.S. $4 billion annually. (This would increase Canada’s foreign aid budget to at least $11 billion annually.)
• Australia should reduce its emissions by at least 65-80% below 2005 levels by 2030 and provide at least U.S. $2.5 billion annually in climate aid.
• Japan should increase its mitigation of domestic emissions to at least 45-50 % below 1990 levels by 2030 and increase its climate aid to at least $U.S. $9-10 billion annually.

Interestingly, despite its status as by far the largest GHG emitter in the world and one of its wealthiest countries, China was not identified as requiring any changes in terms of its emissions and climate aid targets.

Regarding the developed countries’ existing commitment to contribute at least $100 billion per year in climate aid, only a small percentage of this has gone to the Green Climate Fund established in 2012. It has proven impossible to achieve agreement on the allocation of payment responsibilities or the apportionment of recipient privileges. Meanwhile, demands for funding have greatly increased. India has demanded $1 trillion, and Africa has asked for an estimated $3 trillion to implement its emissions reduction plans by 2030. The OECD estimates that total climate finance (bilateral public, multilateral public, officially supported export credits and mobilized private finance) provided by developed countries reached U.S. $71.2 billion in 2017.* However, the developing countries dispute these figures, largely because much of the aid is in the form of loans rather than grants.

(* OECD 2019 Climate finance provided and mobilized by developed countries in 2013-2017).

No one has yet even attempted to quantify the amount of “reparations” that developed countries should be required to pay, let alone sorting out the attribution of responsibility for damages or the basis for the distribution of the reparation benefits. Debates over these issues will probably go on for years.

At this point, the prospects for a successful COP26 appear unlikely, for several reasons. Based on the demands of the developing countries, taxpayers in the OECD countries can only cheer this result.

To see how far we’ve come, here is Robert Lyman’s 2015 report on this topic entitled “Who Cuts? Who Pays? Show Me The Money!“