Egypt’s Cop27 will see developing nations call for ‘climate justice’

Reuters

• Egypt summit billed as forum for Africa to plead for climate action
• Wealthy lenders distracted by pandemic, war, energy crisis and inflation
• IMF’s new Resilience and Sustainability Trust is $37bn fund
• Richer nations in no position to lecture ‘have-nots’ on use of dirty fuels 

Drought and famine haunt the Middle East. The Dead Sea has fallen to its lowest level in centuries.

Starved of food and fresh water, desperate migrants criss-cross the Mediterranean, fomenting social unrest and violence.

Within a few decades, a healthy global trade network has collapsed. Every major settlement has been abandoned or razed to the ground. 

This may sound like a dire prophecy but is in fact an ancient event known as the Late Bronze Age collapse.

Egypt was the only major civilisation to survive the cataclysm, which its pharaohs recorded as a relentless series of battles against marauders.

If any delegates at the Cop27 summit in Sharm el-Sheikh harbour doubts about the chaos that rapid climate change can cause, they only need to take a short trip to Egypt’s museums of Cairo or Luxor nearby.

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One reputed climate sceptic attending the November meeting is the head of the World Bank, David Malpass, a Trump appointee.

A key question expected to dominate the conference is whether the bank, the IMF and other global financial institutions built after the second world war are willing, or even capable, of tackling this rising threat to the security of nations. 

“Institutions like the World Bank, as admirable as their founding intentions are, were not set up with the purpose of tackling an existential climate crisis,” Alok Sharma, the outgoing president of Cop26, said in his departing speech on 14 October.

Moreover, “there does remain a big deficit in political will” among the wealthiest nations, despite the environmental pledges enshrined in the Paris Agreement of 2015.

In the absence of strong leadership, smaller nations are finding their voice. The summit in Egypt is being billed as a forum for African and other developing countries to plead for action, with climate justice high on the agenda.

According to the African Development Bank, Africa receives less than 5.5 percent of international climate financing, despite having a low carbon footprint and suffering disproportionately from the effects of climate change.

Arab nations are also acutely vulnerable. Water scarcity is hardly a new issue for the Middle East, but it has reached a critical juncture.

Droughts from Tunisia to Syria prepared the ground for the unrest of the Arab Spring while famine and floods have intensified the conflict in Yemen.

Due to its reliance on the Aswan Dam, Egypt is one of eight countries singled out by the World Meteorological Organisation as being at “very high or extreme risk for flood, droughts or both”.

At a preparatory meeting in Cairo in September, African ministers issued a joint communique urging rich countries to meet and expand their pledges at Cop27, including providing more funds to help them mitigate the effects of global warming.

The continent faces a climate financing gap of about $108 billion a year, said Kevin Chika Urama, chief economist at the ADB. 

Yet the G7 and other wealthy lenders are deeply distracted. Even as extreme weather events such as the recent floods in Pakistan drive home the potential scale and impact of climate change, the coronavirus pandemic, war in Ukraine, an unfolding energy crisis and spiralling inflation are compounding pressures on the global financial system.

“The world has lived through shock after shock after shock,” IMF managing director Kristalina Georgieva said in early October.

“And there is no pause button on the climate crisis while we deal with these other crises.”

Calls for fresh funding will likely fall on deaf ears. The idea for a “loss and damage” fund, floated by China and the so-called Group of 77 developing countries, was all-but rejected by rich nations at the last summit in Glasgow. 

The dire financial climate has also squeezed lending. As a long-time recipient of soft loans and grants from the US, the World Bank and others, host nation Egypt is acutely aware of the problem.

“This is keeping us up at night – how to decrease the cost of borrowing,” deputy finance minister Sherine El Sharkawy told the recent Cairo forum. 

One constructive proposal is to rejig the existing financial architecture. Cop27 will showcase the “Bridgetown Agenda”, championed by Barbados, which calls on lenders to expand their use of low-interest, long-term debt instruments to finance the process of energy transition in poorer nations.

One notion is to offer concessionary loans for projects such as green city initiatives.

A flurry of written proposals exchanged ahead of the Sharm el-Sheikh meeting suggest the World Bank is broadly receptive to the idea.

The IMF, too, has announced that its new Resilience and Sustainability Trust will soon be open for business.

Whereas the IMF has traditionally acted as a lender of last resort, the $37 billion fund will be a more proactive resource aimed at long-term issues facing smaller economies.

Energy will be an obvious discussion point at Cop27, and the ironies of the current gas crisis will be lost on few delegates.

From Europe to Asia, wealthy nations are reviving or prolonging the life of coal-fired power stations and investing in oil and natural gas projects overseas.

Given this “dash for gas” – notably to Africa – they are in no position to lecture the have-nots on phasing out dirty fuels. 

An added irony is that many of the emerging economies most dependent on fossil fuels are often significant investors in clean energy sources and technologies.

China is the most obvious example of this “green paradox”, but Gulf oil producers such as the UAE and Saudi Arabia will be keen to showcase their Masdar and Neom sustainable city projects.

Egypt now produces almost a fifth of its energy from wind farms, many of them located not far from the conference venue in the Gulf of Suez. 

Given the prevailing atmosphere of crisis, it is unlikely that Cop27 will produce any bold statements of purpose. Rather, Egypt has said its priority as host is to nail down as many outstanding commitments as possible.

This will in turn lay the groundwork for signatories to establish the next set of funding targets for 2025 onwards.

Unresolved issues will be carried over to the next summit in the UAE, where the inevitable question will be: Where Paris promised, will Dubai deliver?