‘Climate justice’ is the latest term of art to take center stage.
‘Climate justice’ is the latest term of art to take center stage.
As was the case for the COP26 in Glasgow, Scotland, I’m filing cables on the annual United Nations–led climate-change confab. This year, COP27, or the 27th Conference of Parties, is hosted by Egypt, in Sharm el-Sheikh on the Red Sea. (Find the previous cables here, here, and here.)
TL;DR
As the annual climate conference moved toward its conclusion, everything was coming down to the money. Egyptians and other developing nations wanted a clear announcement on this front, specifically a loss-and-damage fund, something that would require a last-minute change of heart from the Americans. (Spoiler: One was agreed to. More on this to come.)
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With the COP delegates attempting to navigate the hard realities of economic stability, growth, and increasingly strident demands to shift the world away from traditional fossil-fuel energy, “climate justice” is the latest term of art to take center stage. While it is not always clear what it means, it was being attached to every conversation, document, and placard in Sharm el-Sheikh.
At the same time, the EU as well as a coalition of Caribbean nations called for the phase-down of all fossil fuels. They were followed by tiny Tuvalu, a country reliant on imports of diesel that fuel 81 percent of its electric grid. Next up, India called for a commitment to phase down all unabated fossil-fuel use. American and Finnish negotiators followed the lead of the Indians and are banking on promising, but not yet widely available or commercially viable, technologies such as carbon capture to ameliorate the effect of emissions from traditional energy sources.
Powerful words, but ultimately performative. There is no technological path to a phase-down of fossil fuels. De-growth and de-industrialization form the only path to the elimination of the tried and true when it comes to changing energy sources on the scale that many climate policy-makers are looking for.
Meanwhile, the Egyptians and other developing nations were worried that the annual U.N. caravan would pack up and leave this Red Sea refuge before creating a new financing facility — a new office of the United Nations Framework Convention on Climate Change (UNFCCC) — and a mechanism, or financial instrument, to detail the specific terms of how money would flow. The secretariat of the UNFCCC runs the COP meetings and is responsible for coordinating member nations’ responses to the threat of climate change. Establishing a new office to be staffed and authorized to collect and distribute funds would mean that eventually new transfers of financial resources would flow from developed to undeveloped nations. Short of deciding all the details on how to raise and distribute climate-change welfare, the COP could decide to set up the office (the facility) now and work out the details (the mechanism) later. The COP is all about the money, and poorer countries want to see more of it.
But the EU worked hard to get attention and favor on both fronts: unfulfillable promises and new wealth transfers. The EU’s lead climate negotiator, Frans Timmermans of the Netherlands, formerly the lead candidate of the party of European Socialists for president of the European Commission, was the first among the big players to give ground on a new finance facility and mechanism for loss and damage. During a press conference, he indicated that the EU would support “a fund for climate victims” as long as China contributes. The pool of contributors, according to Timmermans, should be broader than the group of developed nations at the time (the early 1990s) when the UNFCCC was first being established.
On this last point, Timmermans and the EU may not realize it has common cause with the United States. This year the U.S. Senate passed an amendment from Senators Dan Sullivan and Mike Lee to the ratification of the Kigali Amendment, another climate treaty. The Sullivan-Lee amendment made it official policy of the United States that China is no longer considered a developing nation for purposes of climate treaties.
What You Won’t Read in the Papers
There are four main categories for the capture of money from wealthy nations to transfer to developing nations or nations supposedly at risk of catastrophic climate-change outcomes.
Adaptation funds are used to transition a nation’s energy sector to renewables. For example, money is provided to retire a coal plant and build a solar installation. Mitigation funds, by contrast, are used to ameliorate the effects of climate change such as rising temperatures or sea levels. Examples include the construction of major hydrology projects for low-lying cities or species protection for affected ecosystems.
Loss funds are most closely analogized to disaster relief. Of course, it is not always easy to ascertain that the latest flood or wildfire is due to climate change instead of poor forest management or construction practices. But there is always “climate justice” available to explain why loss funds should be collected and distributed by the U.N.
The fourth major category of wealth transfer is called “damage” in U.N.-speak. It is here that the hot-button issue of reparations comes to the table. The notion is that the wealthy nations that have emitted carbon dioxide for the past 150 years should make good with the undeveloped nations that have not contributed to the current atmospheric conditions.
When pushback is evident on any one of these claims for more funding, poor nations fall back on a catch-all category of grant-making and lending labeled “capacity building.” The need to build “capacity” is nearly as strong a conversation-stopper as “climate justice.” All of this reminds me of Margaret Thatcher’s quip that “the problem with socialism is that you eventually run out of other people’s money.”
Another Takeaway for Free-Marketeers
Scarcity is a fundamental concept to the economic way of thinking. As a result, it is foreign to the socialist mindset endemic at the COP27 meetings. We live in a world of finite resources and infinite potential combinations of how to organize and use them. Through innovation, we develop new, more productive combinations of resources but always face trade-offs among competing goods.
During a conversation from the COP with Representative Michael Cloud (R., Texas), we got into the topic of the limits of foreign aid. At some point, the well runs dry or those resources are put to other uses that have higher perceived value at home. As Cloud put it, “America is a very generous country. We’ve always been there to help, whether that was in different conflicts or when we came to the rescue from people who wanted to enact authoritarian ideas. We’ve helped out in times of need.”
Cloud concluded, “It isn’t like there’s never a place for that, but a lot of these initiatives are couched in altruistic terms when it’s really about restructuring the world in a way so that the principles that this nation was founded on will not have the influence that they’ve had in the past.”
While at the COP27 meetings, I also had a conversation with Representative Randy Weber (R., Texas), who highlighted the role innovative technologies like carbon capture could play to radically reduce stationary-source emissions. It confounds Weber that President Biden went to Saudi Arabia in August to plead with OPEC to produce more oil when there is a much lower emission alternative right here in America.
Weber asks, “Why didn’t he come to Texas and ask us to produce more oil? We could do it. We’ve proven that we can capture carbon and store it. I have the country’s largest carbon-capture sequestration storage facility in my district over in Port Arthur, Texas.”
The episode highlights the perverse effects of the nationally determined contributions (NDCs) under the 2015 Paris Agreement. Every five years each signatory nation is expected to submit an updated climate-action plan outlining its contributions toward reducing the risk of catastrophic climate change. In April 2021, President Biden established a new NDC — or set of goals — that calls for the U.S. to achieve a 50 percent reduction in economy-wide greenhouse-gas emissions by 2030, using 2005 levels as a baseline.
As a result, knowing that both the production and transport of fossil fuels creates emissions, the administration would prefer Americans to import oil. Trading off higher costs, lower security, longer supply chains, and greater overall emissions for the appearance of lower domestic emissions is a cynical political act but a direct result of the Paris climate agreement.
But it just might work, because the capacity for voters to pay attention is limited and scarce.