Can China Bail-out COP28?
Ice caps melting, large sheets of ice breaking away and heading towards land masses, accelerating freak weather, once-in-a-century storms making comebacks, tornadoes tearing through country sides, and freak whether becoming even more freak!! Amidst all this, the who’s who of climate change, the advocates or promise-makers (not decision-makers) for curtailing carbon emissions, gathered together in an oil-producing country (Dubai) with the intent to reduce oil production!
The same accusations were hurled around again this year, like they have since the time when the earth was a lot cooler.
Developed Country Ambassador: You Developing Nations are the main polluters of the planet with fast growing populations thereby contributing to more than 65% of Global warming!!
Developing Country Ambassador: Errr ... Okay .. I mean, seriously Uncle Sam and co?! If that is how you want to play this, you rich guys have contributed to more than 50% of the historical emissions on this planet.
Developed Countries Ambassador: Look. We all have to cut carbon emissions equally now, before the earth’s temperature goes up by 2 degrees by the end of the century or even sooner, and then we will all suffer the same consequences.
Developing Country Ambassador: What nerve? You guys had decades of economic growth, manufacturing Lamborghini’s and factories spewing out Hummers which literally smoked up the skies. Now you want to deny us that same growth. Fine!! Tell you what. How about if you pay us reparations to the extent of USD $ 10 Billion for giving up our economic growth and all will be fine.
Developed Countries Ambassador: Are you crazy? Even if we all pooled our resources together, we wouldn’t be able to afford that much.
Developing Country Ambassador: Well, didn‘t you just say we would all suffer the same consequences?
And so this back-and-forth dialogue plays out as many times as they meet. There will be unanimous agreement on what has to be done after much deliberation (behind closed doors), giving one the feeling that if deliberations were the order of the day, then remaining true to the spirit of reducing carbon footprint, these conferences would be better off being held virtually on Zoom.
At the end of the final day of COP28, we were apparently made to believe that an agreement unlike any other had been reached by all the warring parties. It is common knowledge though that these are after all non-binding commitments and are left to the governments of the day to enforce these mandates on their populations.
Climate change erodes livelihoods and even costs governments unnecessary expenditure, especially when floods ravage towns and destroy crops, triggering a chain reaction whose ripple effects can be felt in far-flung regions.
The question that remains is: who is going to foot the bill?
The reparations demanded by developing economies this time around were to the tune of USD $400 billion. Until now, a handful of developed countries have pledged up to USD $700 million, a sizeable shortfall but something nonetheless.
Given the sluggish pace of economic growth the world over and overstretched central banks in developed countries with their finger on the inflation knob, it would be hard for any additional amount to be committed, let alone justified.
If developed countries (who control the global monetary system) and their multilateral institutions can’t step up to the table to help here, then who can?
Ever since Xi Jinping took over the reins of the Chinese Communist Party (CCP), China has gone into overdrive. The massive Belt and Road Initiative (BRI), the flagship infrastructure project of Xi, has been a boon to many countries starved of infrastructure funding by multilateral institutions on account of stringent capital requirements.
Ethiopia, Kenya, and Nigeria are some of the African countries that have been beneficiaries of the BRI. Whether it is railroads that criss-cross these countries, connecting their important towns to cities, facilitating trade, or even the occasional high-speed rail, it is clear that China has no qualms about loosening her purse strings.
However, lurking behind this largesse are a coterie of state interests plying their own agenda. Nigeria in particular is a case in point as to what can go right and wrong with BRI investment in the country. Elsewhere, even countries such as Sri Lanka went bankrupt due to their inability to service their loans taken from BRI.
So while it’s true that China is writing open-ended cheque’s for developing nations, it’s not only investing in building countries but also in forming alliances.
The irony of it all is that after a decade of spending close to a trillion dollars globally on building infrastructure (BRI), China still cannot claim to have the soft power that America has and is still viewed with suspicion by many of its neighbors, although it has been doing everything right according to its own playbook.
Therein lies the opportunity.
As mentioned above, climate funding is what the world needs now, and lots of it. This is where China can step in to offer reparations to developing countries. It is true, though, that reparations will not give the CCP any immediate tangible benefit, but this act could erase a lot of the suspicion that governments across the world have about China and her interests. By offering reparations, China can also offer to build sustainable energy plants in developing countries to assist in their transition to clean fuel.
However, since 2022, China’s economic growth has been gradually slowing down (for want of a more accurate picture), and from reigning its titans such as Ali Baba to its new goal of common prosperity, they may have to settle for medium to average growth for the next few years. Having said that, the picture doesn’t look too bleak for them.
Through the BRI, China attempted to reshape trade routes and put itself at the center of global trade by recreating the once-famous Silk Route. One can argue that this has met with mixed success. Through climate finance, however, China could alter the prism through which the world looks at her and prove to the world that she indeed has global interests at heart.
