“Ours is the last generation which can head off the worst effects of climate change and the first generation with the wealth and knowledge to eradicate poverty”, said Helen Clark at the United Nations Sustainable Development Summit on 25 September 2015.
It is estimated that by the middle of this century, climate change could put some 400 million people at risk of food and water shortages, as well as posing significant economic and business risks. Each of the last three decades has been successively warmer than any preceding decade, with global average surface temperature showing a warming of 0.85 deg. C between 1880 and 2012. The great ‘global warming myth’ is a myth no more and it is fossil fuels (oil, coal, and natural gas) that are most regularly admonished as the single greatest contributing factor to climate change; hence, UN Sustainable Development Goal 7.
Last month, 150 world leaders met at the UN Headquaters in New York to adopt the 2030 Agenda for Sustainable Development, including the Sustainable Development Goals (SDGs). These 17 Global Goals aim to end poverty, hunger, and inequality, as well as improving access to health and education and taking action on climate change.
SDG 7 has as its targets that we will, by 2030: ensure universal access to affordable, reliable and modern energy services; increase substantially the share of renewable energy in the global energy mix; double the global rate of improvement in energy efficiency; enhance international cooperation to facilitate access to clean energy research and technology, and promote investment in energy infrastructure and technology; and expand infrastructure and upgrade technology for supplying modern and sustainable energy services for all in developing countries.
Even in advance of these new, global objectives promoted by the UN, many countries have individually been looking at how they can start to reduce their environmental impact and tackle climate change head-on. Sweden for instance has long since been trying to reduce its dependence on fossil fuels, for political and economic reasons as much as environmental ones. The Swedish Prime Minister, Stefan Löfvén, has recently declared he believes that with a concerted national effort, Sweden could be fossil-fuel free by 2030 – and Sweden is not alone. Scotland, Denmark, Norway, Finland, France and Germany are all well-suited to end their reliance on fossil-fuels over the next couple of decades, with many of their government’s having made pledges to that effect over the last 12 months.
A commitment to creating effective environmental policy has been growing over the last few decades as public expectations shifted and more and more governments became aware of the damages that fossil fuels are causing. However, despite SDG 7, these attitudes have not yet been adopted by every UN member state. The US, China, Japan, Russia and Brazil continue to be some of the world’s fastest growing economies, , and at the same time the greatest consumers of oil: The global energy market is still big business: China alone builds a new coal-fired power station every two weeks; and in 2013 the fossil fuel companies were reported to have spent over $213 million lobbying US and EU decision makers to protect their industry. With this reality, it is questionable to what extent SDG 7 will really put a halt to global warming. Any fight against climate change must ignore the oil producers and include significant commitments by all economies that go far beyond the requirements of SDG 7.
While individual country’s commitments often seem insufficient, it would be unfair to suggest that there has been no effort at all among those states.
In November 2014, US President Barack Obama and Chinese President, Xi Jinping signed a deal setting up target emissions for CO2 up to 2030 but with energy needs of the global population having risen six-fold in the past 50 years, and 90 per cent of all global energy continues to be made by burning fossil fuels, targets will need to be far more ambitious than at present.
While we can have such expectations of the more advanced global economies, a policy change such as eliminating or even reducing the consumption of fossil fuels in an effort to combat climate change would have a far more significant impact on those countries seeking to ‘catch-up’ with the rest of the world than for those having had a history of economic growth already.
The industrial revolution, and the 250 years of growth that followed, can largely be attributed to the contributions made by the use fossil fuels as a source of cheap and plentiful energy. With increased globalisation, the developing world is highly aware of the benefits that have followed high fossil fuel consumption: a competitive advantage in the production of many goods; increased international trade; and the socio-economic improvements that come from having strong industrial sector. Limiting developing country’s access to the same growth – which the western economies have been enjoying for the last 200 years – can at best be viewed as hypocritical. With 637 million African’s living below the poverty line, but an abundance of available fossil fuels across the continent, Africa’s consumption of energy is going to rise dramatically in spite of the UN Sustainable Development Goals. With an allocation of only $1bn a year for climate change adaption and mitigation, funding for Africa’s energy to come from alternative sources is simply not available in the quantities necessary to transform the continent, leaving Africa will little choice but to consume high quantities of fossil fuels to foster its development.
The economic impact of an artificially created reduced demand for fossil fuels could also be staggering for the current energy exporters. The recent oil crash has given many economies an insight into a world without a successful trade in fossil fuels, and it is a troubling picture: since June, oil prices have more than halved from around $110 a barrel to less than $50 for the first time since 2009. Russia, as one of the world’s largest oil producers (70 per cent of exports) has raised interest rates by 17 per cent and the World Bank has warned, that if prices remain as they are, Russia could see a 0.7 per cent shrinking of their economy by the end of the year. The Gulf states have not been so heavily hitAlthough energy makes up as much as 90 per cent of exports and 80 per cent of government revenue for some states, their considerable foreign currency reserves give them some room for manoeuvre in case of a arising deficit. Russia and the others are not so fortunate. According to IMF predictions, Russia would need oil prices in excess of $105 to balance their budget; this figure is equally high for Nigeria ($123) and Libya ($184). The revenue shortfalls experienced by all energy exporting nations has been significant: only a sustained return to high oil prices would remedy this. Yet, with a global consensus to reduce consumption of fossil fuels, a rapid diversification of exports will be necessary in the near future. This will be a testing feat for experienced leaderships such as Russia and Kuwait but for economies such as South Sudan it may be almost impossible – even with substantial international assistance.
Whatever effects the changing attitudes towards fossil fuels may bring, the time for action is now. For every $1 of investment in cleaner technology that is delayed until after 2020, an additional $4.30 will be needed to compensate for the additional carbon emissions. If we are to slow global warming, we as citizens must apply greater pressure to our own governments to implent policy that goes far beyond the demands of SDG 7, including: reducing our carbon footprint; investing more to develop alternative fuels sources; and providing far greater financial assistance to help developing economies to mitigate their environmental impact without hampering their growth prospects. SDG 7 is a comprehensive commitment and a valuable starting point for any plans for climate change reduction. The more advanced UN member states must now take inspiration from this goal and prioritize the development of strong, specific commitments to stopping global warming. In doing so they will take up much of the slack from the less advanced economies whose priorities must continue to be their own development.
Emma Christie is an Economist at the Greater London Authority where she specialises in London-centric policy. Her most recent research has focussed on social impact investing and sports participation. Emma holds a MA in Conflict, Security and Development from King’s College London and a BA in Economics and Politics from Durham University where her primary interests included economic development, peacebuilding, and defence policy. You can find her on LinkedIn and Twitter
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