The expectations for the climate conference in Egypt were high: would it finally be possible to create a fund for those often poor countries that are already suffering massively from climate-related weather catastrophes, would they finally be compensated for it?
A historic decision was made in Sharm el Sheikh over the weekend. The devastating floods in Pakistan were a final impetus to finally set up a corresponding relief fund.
The decision is also historic for another reason: China should also help to make amends for the damage and pay into the new pot. So far, the country has been able to comfortably retreat behind the divide between developing and industrialized countries that dates back to the start of climate negotiations in the 1990s.
At that time, emerging countries should still be allowed to grow, while the industrialized countries already had to reduce their emissions. China is now the second largest economy in the world and the biggest polluter. This has now had consequences on the international stage. However, it is still questionable whether and how China will meet the obligation.
The climate conference also launched a new work program to close the gap between aspirations and reality when it comes to climate protection. It’s more ambitious than slower countries like Saudi Arabia would like it to be, but probably not good enough to keep the 1.5 degree target within reach.
An idea from the last climate conference in Glasgow has also turned out to be a failure. Since then, as many countries as possible should have submitted a new, improved climate target. Only two dozen have done so, most of them small issuers.
Another downside is that there is no call for a cutback in coal, oil and gas in the text accompanying the resolutions. This is presumably thanks to the 600 fossil industry lobbyists, some of whom were directly involved in the negotiations.
It is regrettable that the conference did not set a clear signal against fossil fuels, especially in connection with the energy crisis. Investments in new gas fields could maneuver the world into new impasses in terms of climate technology.
On the other hand, a new partnership that is intended to support Indonesia in phasing out coal and moving into renewable energies is encouraging for climate protection. G7 loans and private sector investment will help solve a financial problem in the energy sector’s transformation: the higher cost of capital in the Global South.
The reform of the financial system is a long time coming
Anyone who has to pay much higher interest rates for the high initial investment in photovoltaic or wind power plants than in an industrialized country will think twice about phasing out cheap coal.
The international community would therefore have to go much further in reforming the financial system. The Paris Agreement stipulates that financial flows worldwide should be geared to the requirements of climate protection. There have been no resolutions on this so far, and the topic could not be anchored on the agenda of the conference in Egypt either. However, the spring conference of the World Bank will deal with this in the near future.
The large programs for green hydrogen in developing countries, which were decided in Sharm el Sheikh, are promising. Chancellor Olaf Scholz has something similar in mind when he wants to present the admission requirements for his “climate club” in the near future. It is intended to provide a framework for the transformation in the industry.
Overall, things are progressing, but the forces of inertia are still too great to maintain a tolerable climate on earth for people.
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