The United Nations climate change conference, COP28, has entered the final stretch. Negotiators are brainstorming on the future of fossil fuels. According to Ugandan climate activist Vanessa Nakate, “the success of COP28 will depend on leaders calling for a just and equitable phase-out of all fossil fuels without exceptions and distractions.” European Union climate commissioner Wopke Hoekstra has promised a big push on the issue.
The current COP president, Sultan Al-Jaber, who also heads the UAE’s state oil company ADNOC (Abu Dhabi National Oil Company), kicked up a row when he said that there was ‘no science’ showing that the phase-out of fossil fuels was going to limit global warming. After an uproar, he backtracked. The UAE is a major exporter of oil and natural gas.
Fossil fuels are a major source of climate-warming emissions; of the nearly 200 countries at COP28, at least 80 are demanding an agreement calling for eventually ending their use.
World leaders have called for transformative climate policy action to phase out fossil fuels. The UN Production Gap, Global Stocktake and Global SDG (Sustainable Development Goals) reports have warned of the dangers of increasing fossil fuel production, lack of climate finance and unfulfilment of SDGs by 2030.
However, the leaders have missed an opportunity to integrate the role of natural capital in global climate action and failed to recognise that environment and economy are not substitutes for each other, but are complementary for sustainable development. The divergence in global climate policies and actions continues due to the economic model of capitalism. The production of goods and services is determined by the forces of supply and demand in the market economy and governments have a limited role in making the profit-bound capitalists fall in line for the sake of climate-resilient development and equity.
The world’s economic success has created twin problems: income inequality and climate change. Global economies have gone wrong in advocating the doctrine which states that there are no fundamental differences between natural capital and man-made capital. This doctrine advocates that at a given point of time, the total value of aggregate stock of capital can be maintained. It means that natural capital can be interchanged with the man-made one. In fact, this cannot be done. This model of economic growth has led to widespread destruction of natural capital all over the world, and also emission of greenhouse gases. The end result is climate change.
Neo-liberal economic policies have created new challenges for the world, including climate change, environmental pollution, inflation, high cost of living, hunger, poverty, inequality and health issues, which impose a high cost on society.
Markets do not consider the depreciation of natural resources in estimating the GDP and there is also a narrow understanding of welfare and wellbeing in terms of utility or satisfaction based on materialistic consumption and wealth accumulation. The economic development is largely carried out in the name of the poor, but it fails to lift millions of people out of poverty. In fact, it has created a huge income inequality between the rich and the poor. Around 700 million poor live in extreme poverty across the world with less than $2.15 per day, and largely it is these poor who suffer from climate-related natural disasters, with no economic resilience.
Therefore, there is an urgent need to redefine economic development in the context of climate change and growing income inequality. Development for whom and at what cost needs to be brought into economic policies. Prime Minister Modi’s speech at COP28 clearly highlighted how “a small section of humanity has indiscriminately exploited nature”; undoubtedly, the Global South is the victim of flawed economic models of the Global North. India’s economic development model is propelled by neo-liberal policies, yet it is crucial for it to undergo transformation towards achieving a balance between the economy and the environment.
The Indian government’s initiatives such as ‘LiFE’ (Lifestyle for Environment) encourage lifestyle changes for sustainable development and restructuring the economy. India’s carbon credit policy can help realise LiFE economy, benefiting farmers economically and promoting conservation of nature through afforestation.
A transformation of production and consumption patterns is a must for the survival of the human race, given the frequent onslaught of natural disasters influenced by climate change. The processes of production and consumption can imbibe and integrate mitigation and adaptation in reducing the ecological footprint.
The UN can begin with population policy, assessing the resource needs for both present and future generations to enhance human wellbeing and capabilities over the next 50 years. Subsequently, it can propose an integrated economic and environmental policy to achieve a LiFE economy. The policy shift is needed not only to reduce the carbon footprint but also to spur lifestyle changes.
Negotiators at COP28 are mulling various options, including a call for a fossil fuel phase-out to be spearheaded by wealthy nations as they are the historical polluters and have been exploiting their resources for decades.
Notably, India and China, the biggest coal consumers in the world, refrained from signing a pledge at the climate summit to triple the world’s renewable energy capacity and put an end to the financing of new coal-fired power plants. There is no quarrel with the argument that any phase-out or phase-down of fossil fuels should not only be gradual but also fair to the developing world.
Krishna Raj is a Prof, Institute for Social and Economic Change, Bengaluru
This article was published in The Tribune as Redefine Development on December 9, 2023
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