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  • Writer's pictureBen Harris

The participation gap: The role of developing economies in the climate crisis

We are living in a global climate crisis. This is undeniable. For millennia, global carbon dioxide levels had not been above roughly 300 parts per million (ppm) and, in the last 70 years alone, levels have risen from 310 ppm to 410ppm. This is ascension, which came at an unsurmountable pace, has brought us to the highest recorded level ever. A globally coordinated response is required for this transboundary issue.

Many developing economies feel that it is unfair to deny them the industrial revolution that many of the world’s most developed economies benefitted so much from. The revolution that for so many years neglected the multifarious impacts it had on the environment. But developing economies can still benefit from a type of process that is more beneficial to their long-term interest, rather than a fossil-fuelled revolution at the expense of yet more environmental damage that the Earth cannot afford.

Whilst the price of non-renewable energy is always destined to increase in the long run, the opposite is true of renewable energy, as they are intrinsically deflationary. The International Renewable Energy Agency (IRENA) reported an 82% fall in solar energy cost between 2010-2019. This leaves a huge opportunity for developing economies to invest - build the infrastructure to control renewable energy assets and be at the forefront of a green revolution. India is taking the lead on this; it has the world’s most extensive expansion plan in renewable energy and is estimated to be the largest national contributor to the renewable energy upswing in 2021.

New investment in billions of US dollars placed into renewable energy in developed vs developing nations. OECD countries excluding Mexico, Chile, and Turkey are considered "developed" while "developing" nations include all other countries. (Courtesy of the Frankfurt School - UNEP Collaborating Centre for Climate and Sustainable Energy Finance.)

The opportunity for developing economies to become more self-sufficient in energy has political implications too. The availability of renewable energy is reasonably evenly distributed if the infrastructure to capture it is in place. If self-sufficient, developing economies would hold more cards in international negotiations and could advance their own agendas without the risk of critical energy relations being threatened.

The current interests of powerful enterprises often resist substantial investment in renewable energy in developed economies. Developing economies provide a new economic platform upon which to invest substantially. Therefore, developed economies must promote these interests if they are not doing so within their borders. Through the World Bank, in line with the goals of the 2015 UN Paris Climate Agreement, developed economies have pledged over $100 billion yearly to assist developing nations in implementing clean energy solutions through the Green Climate Fund.

This is becoming ever more important to encourage; many Sub-Saharan African countries still suffer from power outages that can last days. In some countries, as many as 20% of households are still not connected to the grid. The resulting frustration of not meeting energy needs has led to many non-renewable projects being supported. Chinedu Ositadinma Nebo, the Nigerian Minister of Power between 2013 and 2019, was in favour of fossil fuel projects, quoted in 2015 saying “Whatever we can do to get Africa from a place of darkness to a place of light … I think we should encourage that to happen”. In the same period, 69% of Nigeria’s World Bank energy sector finance was spent on oil and gas projects, leaving its vast renewable energy potential untapped. This is primarily due to the Nigerian government wanting to meet rapidly rising energy needs. Developing economies and international institutions need to play a more active role in ensuring funds are spent on useful and mutually beneficial projects, in the long-term interest of all.

The idea of “leapfrogging” over large investment into outdated technology by developing nations is not new. Africa, for example, did not heavily invest in landline infrastructure, instead “leapfrogging” to modern and efficient mobile technologies. However, it's important to note that although leapfrogging fossil fuel energy entirely in developing economies may seem like an attractive proposition, it is not practically possible. The energy needs of these rapidly expanding economies need to be met, and it would be to the detriment of human development if some fossil fuel energy use were not allowed. The overall takeaway is that developed economies should be doing all they can to globally increase their renewable energy production capacity. It is in the global interest to do so as it will help reduce poverty and inequality levels in the long run and play a huge role in combating the climate crisis that threatens us all.



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