COP29 another Cop Out by the world’s richest nations

November 25, 2024
bill
Climate change, Degrowth
0 Comments

Over the past week, I have already indicated that a major climate activist event was going on in Newcastle, Australia, which is the largest coal export port in the world. The event – The People’s Blockade – run by the activist group – Rising Tide, which involved thousands of people concerned about climate change gathering near the harbour and engaging. But it also involved protest flotilla’s launching into the shipping channel of the Port in an attempt to block the coal shipments. The cops were everywhere and were heavy handed acting under the imprimatur of the State government which tried to ban the festival but lost courtesy of a last minute Supreme Court ruling the declared the State’s attempt was illegal. At the same time as this grassroots event was unfolding, the elites of the world gathered in Baku (Azerbaijan) under the banner of the – UN Climate Change Conference (a.k.a. COP29) – which is the main global forum for addressing coordinated strategies for the resolution of climate change. The problem is that the talkfest is really just another cop out. Nothing much was achieved and the mainstream economics fictions were at the centre of this inaction – ‘fiscal space is limited’, ‘debt unsustainable’ and all the rest of the bunk, were rehearsed. And accepting the fiction that most nations can run of their own currency, then steered the discussions to how private finance can be facilitated by government to stump up financial support for green transitions. And at that point, we know nothing much other than more profit seeking will eventuate.

The contrast between the two approaches – the grassroots and the corporatised – to the climate issue was massive.

The Newcastle event was about ordinary people who want the coal sector closed immediately yet are relatively powerless in the face of the multinational corporate greed that drives the sector, which is aided and abetted by captive state and federal governments who side with the interests of capital, while pretending to be doing something about the climate issue.

Conversely, and starkly, COP29 was a whitewashing affair (I wouldn’t even say greenwashing) where the elites danced around the issues for fear of upsetting their corporate buddies, and closing some lucrative revolving doors between the polity and the corporations, while reinforcing the narrative that the solution to the emergency lies in the participation of the private financial markets, as if that sector has the interests of the common folk at heart.

Agenda Item 8 on the COP29 – Agenda as adopted – was “Matters relating to finance”, which really was what the meeting was focused on, albeit with a faulty understanding of the capacity of the currency-issuing governments or organisations (in the case of the EU).

That faulty understanding then leads the discussion astray into all sorts of schemes and quantum that simply will never solve the problem at hand.

The COP29 was held in the aftermath of news that large fossil fuel companies were stepping back on earlier announced plans to cut output.

For example, in 2020, BP, the oil and gas company announced it would reduce production of those commodities by 40 per cent on 2019 levels by 2030 as part of its much touted goal to be net zero by 2050.

By 2023, they had reneged and modified the goal to 25 per cent in the wake of the accelerating global energy prices that followed the Russian incursion into Ukraine.

Last month (October 7, 2024), the Reuters report – Exclusive: BP abandons goal to cut oil output, resets strategy – indicated that they were abandoning the target and shifting attention to:

… several new investments in the Middle East and the Gulf of Mexico to boost its oil and gas output …

Profits rule.

The same trend is happening across the world.

Australian governments continue to approve the development of new coal and gas projects which will take the footprint of these sectors way beyond any reasonable limits.

When governments make these decisions, the corporate sector clearly understands that the policy terrain is sympathetic to ever more fossil fuel extraction and use.

With the world currently operating at “1.7 times faster than our planet’s biocapacity can regenerate” (Source)

In Australia, Earth Overshoot estimates that we would need 4.5 Earths if we all lived like US citizens in terms of energy use.

1.7 means that we have to reduce the demands on the planet’s biocapacity.

Which means that economic growth must be curtailed unless we can find a way to reduce the overshoot while still expanding.

And, good luck with that strategy.

Even the Rising Tide Protest Festival, heard speakers that talked about sustainable growth (funded by corporate taxation).

That last linkage – funding growth with taxes – drove me made and I wrote about that last Thursday – A 78 per cent tax on fossil fuel companies in Australia is not required to fund a Just Transition away from carbon (November 21, 2024).

It is understandable why the allure of ‘growth’ dominates.

We associate a ‘lack’ of growth with recession and rising unemployment and hardship.

Any idea that degrowth might be beneficial is thus hard to conceive.

The neoliberal austerity mindset is also amplified in times of recession because governments observe their fiscal deficits rising as a result of the operation of the automatic stabilisers – less activity, less people working, falling tax revenues and rising welfare payments.

The mainstream economic commentary then can invoke all the usual fictions that the deficits are dangerous – public debt will cross the ‘threshold’ between solvency and bankruptcy, interest rates will rise (as the demand by government on scarce savings will rise), inflation will increase (due to excessive government spending), future taxes will rise (to pay back the debt), etc.

All false but powerful in the public narrative where the voters are generally ignorant of matters economic and have been encouraged, bullied, whatever, to associate insights gained about their own household finances with those of the government finances.

No such association is valid but that doesn’t stop the link being made.

As such, governments can easily sell the idea of on-going ‘growth’ to a public that is scared of triggering all these shocking outcomes – government going broke, taxes and interest rates rising etc.

It is such a powerful set of linkages that trying to mount a case for degrowth is nigh on impossible.

Which brings me to COP29.

Several speakers at the Newcastle event on Saturday when I was in attendance noted that the costs of rising sea levels, hotter climate etc were being disproportionately being borne by disadvantaged communities in Australia, particularly coastal indigenous communities in the north.

That observation generalises to a global scale.

The sheer devastation of forests, rivers, subsistence agriculture etc in the poorer nations as the richer nations extract as much resources from thes countries as they can to boost their wealth is massive.

Which is why the more vulnerable and poorer countries at the COP29 Summit were petitioning for much larger financial support from the wealthy nations and more rapid transitions away from fossil fuel extraction and use.

We now know that not much was achieved at COP29.

There we no “firm climate finance targets” even though there was an agreement “to increase funding to help developing nations tackle global warming” (Source).

The developing nations had lobbied for $A1.3 trillion annually by 2035, they will get $A461 billion annually.

In other words, nothing much.

The usual corporate-speak came out of the Summit – so the massive shortfall in financial commitment was sold by the UN Secretary-general as “a base on which to build”.

In other words, nothing much.

The Panama representative was quoted as saying:

… this is what they always do. You know, they throw texts at us at the last minute, shove it down our throats. And then for the sake of multilateralism, we always have to, like, accept it and take it.

In other words, the fortunes of the developing world are still at the behest of the wealthy countries and their corporate sectors.

A comment from Saint Lucia’s representative was stark when referring to the vicious cycle of extreme climate events and the debt burdens borne by these nations:

Our developmental gains are undermined, as national infrastructure, built with significant multilateral loans, are destroyed before the debt is paid, and we must rebuild from scratch.

The perfect trap – that the IMF and World Bank have refined over the years to enrich their own executives and the wealthy nations.

The comment from Australia’s climate change minister was beyond printing – fudging around with numbers to confuse the reader into thinking they wanted to do something when in fact they are still approving new gas and coal mine projects.

Onward to the 2026 COP30 in Belém, Brazil with no concrete action agreed.

So the capacity of the developing nations to pursue a transition away from fossil fuels will be directly limited.

But moreover, the fact that the developed nations (developed in a capitalist sense) refuse to bite the bullet and we now have the US besotted by ‘drill, baby, drill’, means that the causal linkages between the poor and rich nations will condition to endanger the former.

The emphasis in the Agenda of the meeting was clearly financial but the rich nations have little thirst for using their own currency-issuing capacity, which is infinite, to honour the moral obligation they have to the poorer nations that bear the brunt of the wealth generation systems that extract resources from them.

The final – Decision -/CMA.6 – document focuses on ‘Finance’ – even though the Agenda has other considerations for discussion.

We read that:

1. There is “limited fiscal space, unsustainable debt levels …” constraining public funding of climate goals.

2. Seek funding from “a wide variety of sources … including alternative sources”.

3. “Invites international financial institutions, including multilateral development banks as appropriate, to continue to align their operational models, channels and instruments to be fit for purpose for urgently addressing global climate change, development and poverty …” – which includes governments reducing the ‘costs’ of financing from private sources – that is, making it easier for the banksters to profit with lower risk.

So the message was clear in the other documentation and discussions – governments are financially-constrained and after the fiscal support during the early years of the pandemic, have built up debt levels that must be reduced – all of which means they are unable to fund the climate change measures that are deemed to be necessary.

And, as such, they should make it easier for private financiers to get involved.

The fact that governments are still approving and facilitating fossil fuel projects was not mentioned – no surprises there.

Further, where multilateral agencies are involved we can expect conditionality to be at the centre of the financing agreements – which you should read as imparting an austerity bias on other social expenditures and policies that make it even easier for first-world resource extraction corporations and their financial buddies to vacuum out profits from the poorer nations.

COP29 also ignores the dependency issue.

I first started to analyse that issue in this blog post – Delinking and degrowth (September 5, 2024).

The problem facing poorer nations is manifest.

The 1.7 consumption number means that the world as a whole has to stop using resources at the rate it currently is.

The reduction has to be massive – not fiddling around the edges.

Citizens in the advanced nations will have to seriously curtail their consumption across the spectrum – food, housing, transport, etc.

Lots of activities that people find interesting will have to cease.

There is no clear cut way defined whereby that transition can unfold in a satisfactory manner.

That is problem number 1.

But, to alleviate poverty, it is hard to see how degrowth can occur, immediately in the poorer nations, which means the adjustment of the richer nations will have to be that much greater, especially given the variations in dependency ratios across the world.

Rich and poor nations have high dependency ratios but for the rich nations it is ageing, while for poorer nations the high dependency ratios are driven by a young population, with lots of people coming into the adult workforce seeking work over the next decade or so.

But, if we could contrive a successful degrowth strategy in the richer nations – and one hopes that is achievable – then within the current structure of world production, resource use and trade, that would massively disadvantage the poorer nations.

That is because of the poorer nations are dependent on the richer nations in two ways:

1. That the poorer nations are suppliers of natural resources and cheap labour which allow the richer nations to prosper.

2. The richer nations create institutions and mechanisms which prolong and reinforce the state of dependence and keeps the poorer nations poor.

This dependency allows some poorer countries to achieve some form of industrialisation, typically using second-hand technology sold to them under oppressive contracts by the rich nations, and which trap them in a financial dependency through loan deals etc.

However, the idea that the global economy is structured in such a way that core rich nations exploit the peripheral nations and keep them in a state of underdeveloped dependency where unequal exchanges between the two ‘levels’ results in a net wealth flow to the core nations, must become a crucial aspect of the way we might construct the degrowth agenda.

The poorer nations are not just ‘poor’ versions of the rich nations, as the mainstream development theories hold.

Their underdevelopment is functionally required to advance the development of the core.

So problem number 2 relates to the two-part process that the poorer nations must traverse:

1. ‘Delinking’ their economies from the richer countries – that is, working to unravel the binds that colonialism placed the poorer nations within – a process that Samir Amin called ‘autocentric development’, which is different from autarky.

They must prioritise their own domestic objectives – food sovereignty, wage justice, employment guarantees, etc.

They must eliminate the ‘middle class’ (Comprador Bourgeoisie) which has prospered within the poorer nations through their brokering of the foreign interests.

2. Then pursuing degrowth themselves within a more constrained environment as a result of poverty.

None of these issues were dealt with by COP29, which really means that its deliberations were largely irrelevant in the context of what is required.