Climate injustice at Glasgow COP-out

by Anis Chowdhury and Jomo Kwame Sundaram

SYDNEY and KUALA LUMPUR: The planet is already 1.1°C warmer than in pre-industrial times. July 2021 was the hottest month ever recorded in 142 years. Despite the pandemic slowdown, 2020 was the hottest year so far, ending the warmest decade (2011-2020) ever.

Betrayal in Glasgow

Summing up widespread views of the recently concluded Glasgow climate summit, former Irish President Mary Robinson observed, “People will see this as a historically shameful dereliction of duty,… nowhere near enough to avoid climate disaster”.

A hundred civil society groups lambasted the Glasgow outcome: “Instead of a multilateral agreement that puts forward a clear path to address the climate crisis, we are left with a document that takes us further down the path of climate injustice.”

Even if countries fulfil their Paris Agreement pledges, global warming is now expected to rise by 2.7°C from pre-industrial levels by century’s end. Authoritative projections suggest that if all COP26 long-term pledges and targets are met, the planet will still warm by 2.1℃ by 2100.

The United Nations Environment Programme suggests a strong chance of global warming disastrously rising over 1.5°C in the next two decades. Earlier policy targets – to halve global carbon emissions by 2030, and reach ‘net-zero’ emissions by 2050 – are now recognized as inadequate.

The Glasgow UN Framework Convention on Climate Change 26th Conference of Parties (COP26) was touted as the world’s ‘last best hope’ to save the planet. Many speeches cited disturbing trends, but national leaders most responsible for greenhouse gas (GHG) emissions offered little.

Thus, developing countries were betrayed yet again. Despite contributing less to accelerating global warming, they are suffering its worst consequences. They have been left to pay most bills for ‘losses and damages’, adaptation and mitigation.

Glasgow setbacks

Glasgow’s two biggest hopes were not realized: renewing targets for 2030 aligned with limiting warming to 1.5℃, and a clear strategy to mobilize the grossly inadequate US$100bn yearly – promised by rich country leaders before the Copenhagen COP in 2009 – to help finance developing countries’ efforts.

An exasperated African legislator dismissed the Glasgow Leaders’ Declaration on Forests and Land Use as an “empty pledge”, as “yet another example of Western disingenuousness … taking on the role of ‘white saviour’” while exploiting the African rain forest.

Meanwhile, far too many loopholes open to abuse remain, undermining efforts to reduce emissions. Further, no commitment to end fossil fuel subsidies globally – at US$11 million every minute, i.e., around US$6 trillion annually – was forthcoming.

No new oil and gas fields should be developed for the world to have a chance of getting to net-zero by 2050. Nevertheless, governments are still approving such projects, typically involving transnational corporate giants.

Various measures – e.g., ‘carbon capture and storage’ and ‘offsetting’ – have been touted as solutions. But carbon capture and storage technologies remain controversial, unproven at scale, expensive and rarely cost-competitive.

The Glasgow outcome did not include any commitment to fully phase out oil and gas. Meanwhile, the language on coal has been diluted to become virtually toothless: coal-powered plants will now be ‘phased down’, instead of ‘phased out’.

Offsets off track

Offset market advocates claim to reduce emissions or remove GHGs from the atmosphere by some to ‘off-set’ emissions by others. Thus, offsetting often means paying someone poor to cut GHG emissions or forcing them to pay someone else to do so. With more means, big business can more easily afford to ‘greenwash’.

Carbon offset markets have long overpromised, but underdelivered. As they typically exaggerate GHG emission reduction claims, offsetting is a poor substitute for actually cutting fossil fuel use. Meanwhile, disagreements over offset rules have long stalled international climate change negotiations.

Buying offsets allows GHG emitters “to keep polluting”, albeit for a fee. Highly GHG emitting activities by wealthier individuals, companies and nations can thus continue, after “transferring the burden of action and sacrifice to others” – typically to those in poorer nations – via the market.

For Tariq Fancy – who managed ‘sustainable investing’ at BlackRock, the world’s largest fund manager – the market for offsets is a “deadly distraction”, “leading the world into a dangerous mirage, … burning valuable time”.

Meanwhile, most established offset programmes – e.g., the United Nations’ REDD+ programmeor the Kyoto Protocol’s Clean Development Mechanism – have clearly failed to meaningfully reduce GHG emissions.

More than 130 countries have committed to achieve net-zero by 2050. But net-zero targeting has actually allowed the world to continue kicking the can down the road, instead of acting decisively and urgently to verifiably cut GHG emissions.

Hence, it is seen as a cynical “scam”, “nothing more than an expensive cover-up for continued toxic emissions”. Trading non-verifiable offsets – supposedly to achieve net-zero – allows continuing GHG emissions with business almost as usual.

Loss and damage?

Vulnerable and poor nations have argued for decades that rich countries owe them compensation for irreversible damage from global warming. In fact, no UN climate conference has delivered any funding for losses and damages to countries affected.

Rich countries agreed to begin a ‘dialogue’ to discuss “arrangements for the funding of activities to avert, minimize and address loss and damage”. Representing developing nations, Guinea expressed “extreme disappointment” at this ruse to delay progress on financing recovery from and rebuilding after climate disasters.

Developed nations account for two-thirds of cumulative emissions compared to only 3% from Africa. Carbon emissions by the wealthiest 1% of the world’s population were more than twice those of the bottom half between 1990 and 2015!

Low-lying small island nations – from the Marshall Islands to Fiji and Antigua – fear losing much of their land to rising sea levels. But their longstanding call to create a ‘loss and damage’ fund was rejected yet again.

South Pacific island representatives have expressed disappointment at lack of funding for losses and damages, and the watered down language on coal. For them, COP26 was a ‘monumental failure’, leaving them in existential peril.

Although historical responsibility for GHG emissions lies primarily with the wealthy countries, especially the US and the European Union, once again, they have successfully evaded serious commitments to address such longstanding problems due to global warming.

Climate injustice

For the UN Secretary-General, “[o]ver the past 25 years, the richest 10% of the global population has been responsible for more than half of all carbon emissions, and the poorest 50% were responsible for just 7% of emissions”.

The World Bank estimates that, if left unchecked, climate change will condemn 132 million more people into poverty over the next decade, while displacing more than 216 million from their homes and land by 2050.

Meanwhile, poorer countries – who have contributed least to cumulative GHG emissions – continue to suffer most. To address climate injustice, rich countries – most responsible for GHG emissions and global warming – must do much more.

Their finance for developing countries ought to be much more ambitious than US$100bn yearly. Financing terms should be far more generous than currently. Also, funding should prioritize adaptation, especially for the poorest countries most at risk.

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WTO finished without TRIPS waiver

Jomo Kwame Sundaram and Anis Chowdhury

KUALA LUMPUR and SYDNEY: Quickly enabling greater and more affordable production of and access to COVID-19 medical needs is urgently needed in the South. Such progress will also foster much needed goodwill for international cooperation, multilateralism and sustainable development.

The World Trade Organization (WTO) will soon decide on a conditional temporary waiver of Trade-Related Intellectual Property Rights (TRIPS). The waiver was proposed by South Africa and India on 2 October 2020. Two-thirds of the 164 WTO members – mainly developing countries – support it.

But sustained European efforts – of Switzerland, the UK and the EU, led by Germany – have blocked progress ahead of the WTO ministerial starting 30 November. Meanwhile, ongoing text-based discussions seem to be leading nowhere.

IP not needed for innovation Affordable vaccines and drugs have been crucial for eliminating infectious diseases such as tuberculosis, HIV-AIDS, polio and smallpox. But despite strong evidence to the contrary, advocates insist intellectual property rights (IPRs) are needed to incentivize innovation.

Development of COVID-19 vaccines and other therapeutics have been accelerated by considerable government financing. Only six major vaccine developers received over US$12 billion in public funding. Projected revenue from their IP monopolies will exceed tens of billions.

Supply shortages have disrupted vaccine supplies. IP monopolies block competition, making it hard to quickly increase supplies. Thanks to patent protection, for example, only four companies produce plastic bioreactor bags needed to make vaccines.

Cross-border IP enforcement has been enhanced by TRIPS in 1995. The African walkout from the 1999 Seattle ministerial highlighted the WTO’s rich country bias. As part of the compromise to revive WTO talks, TRIPS has included a ‘public health exception’ since 2001.

Subject to onerous conditions and paying fair compensation, ‘compulsory licensing’ allows making patented products using processes without patentholder consent. Yet, European negotiators still insist that voluntary licensing provisions are enough.

All licensing requires case-by-case, patentholder-by-patentholder, country-by-country negotiations. But licensing is only limited to patents, without requiring sharing ‘industrial secrets’ needed to make complex biochemical compounds.

Time consuming, onerous and costly, such negotiations are beyond the means of most poor countries. Worse, some high-income country (HIC) governments have blocked such licensing, even when agreed to by companies.

IP deepens inequalities

The World Health Organization Director-General has noted four-fifths of vaccine doses went to HICs or upper middle-income countries (MICs). Rich countries – with a seventh of the world’s population – had bought over half the first 7.5 billion vaccine doses by November 2020.

Meanwhile, only 1.5% in low-income countries (LICs) were vaccinated by August 2021. Much of the variation in infection and death rates is due to unequal access, not only to vaccines, but also diagnostic tests, medical therapies, protective equipment, devices, equipment and other needs.

The private-public COVAX facility had promised to deliver two billion vaccine doses by end-2021, and to reach a fifth of the people in 92 LICs. But less than half a billion doses have been delivered so far.

Australian academic Deborah Gleeson warns that even as promising new treatments become available, they will be too costly for most in LICs and many MICs. Diagnostic tests are unequally distributed, with HICs averaging over a hundred times more than LICs.

And even when governments and companies are willing to license others to supply small LICs with low-cost generics, most MICs are excluded. Worse, some high-income country (HIC) governments have blocked such licensing, even when agreed to by companies.

Some HICs have been embarrassed into sharing millions of their unused excess vaccine doses. But of the 1.8 billion doses promised so far, only 14% has gone to LICs. Such donations of funds and other needs undoubtedly help.

But such unpredictable acts of charity – e.g., by HICs who bought far more than they needed – are hardly enough. Manufacturing capacity in the developing world must still be enhanced to meet overall needs. This requires the waiver.

Contrary to the claim that the South lacks manufacturing capacity, vaccines have long been made in over eighty developing countries. Although novel, mRNA vaccine manufacture involves less steps, ingredients and physical capacity than traditional vaccines. MSF has identified many capable producers in the South.

TRIPS waiver urgently needed

TRIPS provides 20-year monopolies for patents. These have often been ‘evergreened’, i.e., extended, sometimes indefinitely, ostensibly to reward additional innovation. Thus, most developing countries have been prevented from meeting their health needs more affordably.

The temporary waiver would allow companies everywhere to produce the required items and use patented technologies without infringing IP. Supplies would increase and prices fall. Currently, access to COVID-19 needs is very inequitable, deepening the yawning gap between HICs and LICs.

The revised 21 May text clarifies the proposed waiver is for at least three years from the decision date, subject to annual review. It would cover products and technologies – including vaccines, therapeutics, diagnostics, devices, protective equipment, materials, components, methods and means of manufacture.

The proposal also covers the application, implementation and enforcement of TRIPS provisions on patents, copyrights, designs and other protected information, e.g., undisclosed manufacturing blueprints and industrial secrets.

Thus, the waiver has long been urgently needed to contain the pandemic worldwide. But rich countries have successfully blocked progress thus far despite the heavy human and economic toll it has taken.

Game changer

Unlike the more flexible arrangements of the General Agreement on Tariffs and Trade, the WTO framework and negotiating priorities have undermined developmental aspirations.

The South has been undermined by rich countries’ betrayal of the 2001 Doha compromise. After ‘softly’ killing the ‘Development Round’ promised then, rich countries can now redeem themselves by supporting the waiver.

Almost two years after COVID-19 was first recognized, the pandemic continues to threaten the world, with poor countries and people now worse affected. The devastation could be partly mitigated if developing countries could meet their pandemic needs without fear of litigation for IP infringement.

A TRIPS Council meeting is scheduled for 16 November, before the four-day WTO Ministerial Council meeting from 30 November. The waiver would also encourage renewed international cooperation, long undermined by destructive rivalry and competition.

By refusing to make concessions, rich countries would not only jeopardize the WTO, but also the world’s ability to urgently contain the pandemic. With complementary financial resource transfers, they can restore the goodwill urgently needed for international cooperation and to revive multilateralism.

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Carbon tax over-rated

Anis Chowdhury and Jomo Kwame Sundaram

SYDNEY and KUALA LUMPUR: Addressing global warming requires cutting carbon emissions by almost half by 2030! For the Intergovernmental Panel on Climate Change, emissions must fall by 45% below 2010 levels by 2030 to limit warming to 1.5°C, instead of the 2.7°C now expected.

Instead, countries are mainly under pressure to commit to ‘net-zero’ carbon (dioxide, CO2) emissions by 2050 under that deal. Meanwhile, global carbon emissions – now already close to pre-pandemic levels – are rising rapidly despite higher fossil fuel prices

Emissions from burning coal and gas are already greater now than in 2019. Global oil use is expected to rise as transport recovers from pandemic restrictions. In short, carbon emissions are far from trending towards net-zero by 2050.

False promise

At the annual climate meetings in Glasgow, carbon pricing is being touted as the main means to cut CO2 and other greenhouse gas (GHG) emissions. The European Union President urged, “Put a price on carbon”, while Canadian Prime Minister Justin Trudeau advocates a global minimum carbon tax.

Businesses are also rallying behind one-size-fits-all CO2 pricing, claiming it is “effective and fair”. But there is little discussion of how revenues thus raised should be distributed among countries, let alone to support poorer countries’ adaptation and mitigation efforts.

Carbon pricing supposedly penalizes CO2 emitters for economic losses due to global warming. The public bears the costs of global warming, e.g., damage due to rising sea levels, extreme weather events, changing rainfall, droughts or higher health care and other expenses.

But there is little effort at or evidence of compensation to those adversely affected. Therefore, poorer countries are understandably sceptical, especially as rich countries have failed to fulfil their promise of US$100bn yearly climate finance support.

The CO2 price market solution is said to be “the most powerful tool” in the climate policy arsenal. It claims to deter and thus reduce GHG emissions, while incentivizing investment shifts from fossil-fuel burning to cleaner energy generating technologies.

No silver bullet

Carbon pricing’s actual impact has, in fact, been marginal – only reducing emissions by under 2% yearly. Such impacts remain small as ‘emitters hardly pay’. Most remain undeterred, still relying on energy from fossil fuel combustion. Also, many easily pass on the carbon tax burden to others whose spending is not price sensitive enough.

Only 22% of GHGs produced globally are subject to carbon pricing, averaging only US$3/ton! Hence, such price incentives alone cannot significantly discourage high GHG emissions, or greatly accelerate widespread use of low-carbon technologies.

Powerful fossil-fuel corporate interests have made sure that carbon prices are not high enough to force users to switch energy sources. Thus, existing CO2 pricing policies are “modest and less ambitious” than they could and should be. Meanwhile, several factors have undermined carbon taxation’s ability to speed up ‘decarbonization’.

First, carbon taxes have never actually provided much climate finance. Second, CO2 taxes misrepresent climate change as due to ‘market failure’, not as a fundamental systemic problem. Third, it seeks efficiency, not efficacy! Thus, it does not treat global warming as an urgent threat.

Fourth, market signals from carbon taxation seek to ‘optimize’ the status quo, rather than to transform systems responsible for global warming. Fifth, it offers a deceptively simplistic ‘universal’ solution, rather than a policy approach sensitive to circumstances. Sixth, it ignores political realities, especially differences in key stakeholders’ power and influence.

Unfair to poor

Even if introduced gradually, the flat carbon tax will burden poorer countries more. Worse, carbon pricing is regressive, hurting the poor more. Thus, the burden of CO2 taxes is heavier on average consumers in poor countries than on poor consumers in ‘average’ countries.

A UN survey showed a seemingly fair, uniform global carbon tax would burden – as a share of GDP – developing countries much more than developed countries. Thus, although per capita emissions in poorer countries are far less than in rich ones, a flat CO2 tax burdens developing countries much more.

Also, a standard carbon tax burdens low-income groups more, by raising not only energy costs directly, but also those of all goods and services requiring energy use. With this seemingly fair, one-size-fits-all tax, low income households and countries pay much more relatively.

Analytically, such distributional effects can be avoided by differentiated pricing, e.g., by increasing prices to reflect the amount of energy used. Also, compensatory mechanisms – such as subsidies or cash transfers to low-income groups – can help.

But these are administratively difficult, particularly for poor countries, with limited taxation and social assistance systems. Furthermore, effectively targeting vulnerable populations is hugely problematic in practice.

Mission impossible?

Selective investment and technology promotion policies are much more effective in encouraging clean energy and reducing GHG emissions. Huge investments in solar, hydro and wind energy as well as public transport are required, typically involving high initial costs and low returns. Hence, public investment often has to lead.

But most developing countries lack the fiscal capacity for such large public investment programmes. Large increases in compensatory financing, official development assistance and concessional lending are urgently needed, but have not been forthcoming despite much talk.

Climate finance initiatives generally need to improve incentives for mitigation, while funding much more climate adaptation in developing countries. Potentially, a CO2 tax could yield significantly more resources to cover such international funding requirements, but this requires appropriate redistributive measures which have never been seriously negotiated.

Carbon taxes can help

Even without an ostensibly market-determined CO2 price, taxing GHG emissions would make renewable energy more price competitive. The UN advocated a ‘global green new deal’ in response to the 2008-2009 global financial crisis. It noted a US$50/ton tax would make more renewables commercially competitive, besides mobilizing US$500bn annually for climate finance.

A mid-2021 International Monetary Fund (IMF) staff note has proposed an international carbon price floor. This would “jump-start” emissions reductions by requiring G20 governments to enforce minimum carbon prices. Involving the largest emitting countries would be very consequential while bypassing collective action difficulties among the 195 UN Member States.

The scheme could be pragmatically designed to be more equitable, and for all types of GHGs, not just CO2 emissions. But even a global carbon price of US$75/ton would only cut enough emissions to keep global warming below 2°C – not the needed 1.5°C, the Paris Agreement goal!

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