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COP26, Don’t Pat Yourselves on the Back Until You Consider the Effects of Climate Change Response Measures on Developing Countries
COP26, Don’t Pat Yourselves on the Back Until You Consider the Effects of Climate Change Response Measures on Developing Countries
Manal Shehabi
By Manal Shehabi
Nov 18 2021 · 9 min read

Energy Voices
Sustainability · Climate Change

As COP26 fades into the past, one big takeaway is the extent to which success depends on the cooperation of every nation, both developed and developing. To get the kind of cooperation we need, we must evaluate solutions based on their impacts across the globe and not just in terms of hitting the crucial milestones established during the Paris Agreement.

There are realities that we cannot afford to ignore: while advanced economies are historically responsible for most of the emissions that have contributed to climate change, developing countries are the most affected by climate change. And the $100 billion that rich nations promised to channel to poorer nations annually to help them adapt to climate change has not been met.

So if we try to battle climate change by shifting the costs to and stepping on the backs of developing countries, disadvantaged groups, and indigenous populations, we will have traded one catastrophe for another. Unfortunately, we have already slid in this direction. And avoiding the end result requires that developing countries not only advocate for themselves but also have someone on their side who understands their perspective and can meaningfully advocate for them on all fronts.

In this article, I outline the challenge that the world community faces when it comes to implementing climate policies that are both effective and morally just and offer five steps for moving in the right direction.

Background

One overly simplistic answer to the question, “how did we get here?,” is colonialism. But the answer that gives us the best chance of moving forward is that recent discussions of climate change policy have been focused on all possible solutions (i.e., all possible decarbonization pathways and all governmental policies). Some COP26 commentators have even gone so far as saying that all response measure impacts are positive.

However, while we have been focused on writing climate policy that is intended to save the world (a worthy endeavour for sure), we have lost sight of an important element of policies, namely that response measures to climate change have direct and indirect economic and social implications on the countries in which they are enacted.

To add to that, we have also forgotten another important implication of response measures: even climate policies with positive economic and social implications on the countries in which they are enacted may have negative effects on other countries, including ones that are low emitters and that do not implement climate policies.

For example, the carbon tax in Europe will have positive effects on Europe’s overall greenhouse gas (GHG) emissions but negative effects on agricultural imports from Africa. This is so because implementing carbon taxes would raise the price of imported agriculture. And because the agricultural industry is particularly high emitting, carbon taxes in the developed world can have a large negative effect on demand for agricultural imports and output, which in turn can harm agricultural employees in developing countries who may end up displaced from their jobs due to increasing prices for goods.

Similarly, a carbon tax in Europe would raise the prices on African imports of European products, and consequently, the inflationary effects could harm production and employment in African nations. This effect can be alarmingly widespread across different sectors because, according to eurostat, approximately 70% of all goods exported from the EU to Africa in 2020 were manufactured goods and over 60% were primary goods (food, drinks, raw materials, and energy products). So such an increase could hurt manufacturing industries, economic diversification, and overall household incomes.

Often, the effects on poorer households are more amplified, too! Economies in the world are connected through open trade, so a carbon tax in one jurisdiction affects both the nominal and real exchange rates, the prices of imports and exports, as well as industries and households that depend on them.

To ensure that the cure is not worse than the disease when it comes to the impact of response measures on developing countries, we need to understand the effects of those measures on developing countries, so that we can design policies and just transition measures to ease any negative effects and maximize any positive ones.

Steps to take now

There are five steps we can take to ensure that developing countries are not forced to bear the brunt of both our warming world (for which advanced and large economies are most responsible) and the policy changes developed nations vote to enact.

1. Give developing countries an equal seat at the table

Now there are ways in which developing countries have a seat at the table. Because smaller and poorer countries have less of a voice on the international stage, they form coalitions to amplify their causes. For example, the Least Developed Countries group is a 46-nation bloc of countries most impacted by the climate crisis despite their low emissions, and includes Senegal, Bangladesh, and Yemen and represents one billion people. There is also the African Group of Negotiators on Climate Change and the Group of 77 and China.  There groups were present and active at COP26.

But for both successful climate policy and negotiations, it is important for developing countries to be empowered with information on the effects of external climate policy on their economies. Not only will this information help them to be empowered in the negotiations, but also such information will enable them to design policies to protect the wellbeing of their economies and citizens. To get here, it is important to have advocates who hear the plight of developing countries and can support them or assist them in these areas.

When representatives of developing nations are better prepared to design just transition and other policies that can maximize the positive and minimize the negative effects of response measures, then they will have a true seat at the table.

2. Measure the impacts of response measures on developing countries

Once developing nations have a seat at the table, they need to regularly measure the impact of response measures on their economies. These data are not easy to capture because they require technical skills and models that detail impacts on countries as well as in-country impacts (households, industries, and others). To that end, assistance from technical groups, the UNFCCC, or even member states might be required.

But the required framework already exist. In fact, UNFCCC has mandated that those implementing response measures provide technical support for developing countries to measure the impacts of response measures and also maximize the positives and minimize the negatives. So really, the only missing piece is the will of nations to make this happen.

Still, signs of progress are popping up. I was part of a team that worked on a pilot project to come up with a modeling tool to assess the impacts of response measures on developing countries using case studies from Kenya and Senegal. The modeling tool and its results were presented and well received at COP26.

3. Advance win-win policy reforms

In case you're worried that what I’m suggesting here would set back efforts to slow climate change, allow me to disabuse you of this concern here. Over the past few years, I have had the pleasure of working with the UNFCCC on awareness creation workshops (like this one), which I have presented in developing nations around the world.

In these workshops, I explain how to build capacity through economic diversification as a response measure and what tools to measure, as well as how to measure the impacts, both positive and negative. I also present my own modeling work which examines the effects of response measures like fossil fuel subsidy removal as a measure for low carbon development and economic diversification, as well as the impact of other policy reforms, like increased competition, that can alleviate or even reverse the negative effects of reforming energy subsidies and expand economic diversification. 

My goal with my analyses in these workshops is to provide capacity building and to offer win-win policy reform solutions (as opposed to only asking developing countries to accept the effects of external policies that usually have winners and losers).

4. Make information-sharing the norm, not the exception

Finally, it’s important for practitioners and relevant organizations to contribute to awareness-building and enhanced information-sharing through the exchange and sharing of experiences and best practices, etc.

Through collaboration and input from stakeholders across the globe, we can start a trend of cooperation among nations. While it may be a stretch to get nations with wildly opposing interests to hold hands and sing a happy song, we could start by incentivizing an exchange of information that will foster empathy.

5. Wealthy nations need to meet their $100 billion promise to help poorer nations adapt

12 years ago at the climate summit in Copenhagen, wealthy nations pledged to send US$100 billion per year to the developing world by 2020. This promise was broken.

Although rich nations collectively agreed to finance the consequences of climate change on poorer nations as well as providing funds for transitioning their economies, they made no formal deal about how much each would pay. Instead, countries pledged in the hopes that others would follow their lead.

Now we risk falling further behind financial benchmarks if wealthy nations do not figure out how to make good on their promise. One plan proposed by the V20, a group of finance ministers from 48 climate vulnerable countries, calls for $500 billion over the next five years and at least 50% of the funding to go to climate adaptation measures. This would be a good start. And meeting the $100 billion pledge annually is also a must.

The urgency with which climate change reforms need to be undertaken cannot be overstated and yet, if we ignore the negative effects of these policies, we may save the world at the expense of social, economic, and climate justice. We should insist on implementing appropriate mitigation policies and just transition measures especially for women, youth, indigenous populations, minorities, and vulnerable groups (like refugees)!

Contact the author at manal.shehabi@sheer-ra.com to learn more about response measures to climate change, economic diversification and its measurement using qualitative and quantitative tools, or the modeling tool and impacts of response measures and its impacts on Kenya.

Energy Voices is a democratic space presenting the thoughts and opinions of leading Energy & Sustainability writers, their opinions do not necessarily represent those of illuminem.

Information on aforementioned studies:

* The Report on the Modelling tool for ‘Assessing impacts of the implementation of response Measures’ can be found here:

https://unfccc.int/sites/default/files/resource/RM_case_study_Senegal_Kenya.pdf

The report was led by Professor Scott McDonald (cgemod) for Dr. Kusum Lata (UNFCCC) and coauthored by him, Dr. Lindsay Shutes (cgemod), Professor Karen Theirfelder (US Naval Academy), and Dr. Manal Shehabi (Oxford Institute for Energy Studies and SHEER Research & Advisory).

* The presentation on ‘Quantifying impacts of fossil fuel subsidy reform as response measure for low carbon development’ can be found here:  https://unfccc.int/sites/default/files/resource/d2s6_2manal.pdf

This study was conducted by Dr. Manal Shehabi.

* Information on the ‘Technical expert meeting on economic diversification’ in which Dr. Manal Shehabi participated is found here: https://unfccc.int/sites/default/files/resource/Qualitative%20and%20quantitative%20tools.pdf

This meeting can be watched here: https://www.youtube.com/watch?v=YiBy2e-PsgE

* The example on capacity building at a UNFCCC Awareness Creation workshops on ‘Economic Diversification and its Measurement Using Qualitative and Quantitative Tools’ can be found here:

https://unfccc.int/sites/default/files/resource/Qualitative%20and%20quantitative%20tools.pdf

This work was conducted by Dr. Manal Shehabi.

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Manal Shehabi
About the author

Dr. Manal Shehabi is an applied economist with expertise in economic, energy, and resource sustainability & policy. She is a Senior Research Fellow at the Oxford Institute for Energy Studies and Founding Director at SHEER Research & Advisory Ltd. A polyglot, she advises policymakers and firms, including Fortune 500+ multinationals, mostly in energy and mining industries. She is a recognized expert on economic and energy transition in Gulf oil producers.

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