Who will cover the $71 trillion green bill?
Shifting world away from fossil fuels will require mind-boggling amounts of money
Climate envoys from almost 200 nations have gathered in Madrid for two weeks of talks organised by the United Nations. The ambition at COP25 is to build on the four-year-old Paris Agreement, at which governments pledged to limit fossil-fuel pollution, by reviving a corner of the market in carbon pollution credits.
If that doesn’t sound like stakes commensurate with the ongoing climate crisis, that’s because it isn’t.
Protesters have taken to the streets again and again this year calling for immediate action to cut back on fossil fuels, including thousands of arrests in more than a dozen cities in October alone. The 16-year-old activist Greta Thunberg harangued world leaders for their inaction at the prior UN climate summit.
‘VERY DIFFICULT, BUT IT’S THE ONLY SOLUTION’
The politics of the masses and the politics of the diplomats have rarely been so mismatched as they are at these Madrid climate talks.
“There is a disconnect between what people are asking for and what we’re seeing,” Gilles Dufranse, policy officer at Carbon Market Watch, a Brusselsbased research group that advises companies on how to put a price on greenhouse-gas emissions. “Multilateral meetings are very difficult, but solution we have.”
And billions of dollars could be in play, which is why thousands of companies and hundreds of financial institutions will be watching COP25 closely. Away from the headlines and grand promises sought by environmental groups, the delegates are quietly building a legal framework to support a wall of money that will guide the world in a greener direction.
Scientific findings this year have given an urgency to the process. Carbon emissions and temperatures have been breaking records, which scientists have linked to the increased frequency of violent storms and wildfires everywhere from Sweden to Japan and California.
QUICKEST SHIFT IN CLIMATE IN 10,000 YEARS
Global temperature increases since the industrial revolution are on track to push well past the UN target of 1.5 degrees Celsius, according to research from Climate Action Tracker, a group of three consultants examining the issue.
While few would notice that amount of warming on a single day, when applied to the world as a whole it would mark the quickest shift in the climate since the end of the last ice age some 10,000 years ago.
RAISING CASH REQUIRES SLOW AND CAREFUL WORK
Shifting the world away from fossil fuels will require mindboggling amounts of money. At least $71 trillion (Dh260 trillion) needs to be invested into energy over the next 20 years to reach the nirvana where global warming is held in check and the UN meets its sustainable development goals, according to the International Energy Agency.
That’s about a fifth more than the $59 trillion that the IEA figures will be spent under a business-as-usual scenario.
Raising that amount of cash requires slow and careful work. Like arms control or trade negotiations, the climate talks deliver milestone treaties only after years of preparation.
ADDING POVERTY, WATER TO CARBON MARKET
The carbon market is one of the most complicated mechanisms envoys have worked on, since it touches so many parts of the economy.
The aim is to set up a system that creates credits for work done to reduce emissions. And this year, the envoys will talk about how to add the UN sustainable development goals to the market mechanism, adding issues like poverty and water protection to the list of things that might be able to generate a credit.
There is a disconnect between what people are asking for and what we’re seeing. Multilateral meetings are very difficult, but it’s the only solution we have.” Gilles Dufranse | Policy officer at Carbon Market Watch it’s the only