Nations struggling in forced Green Transition without proper Funding

Several developing countries have made it clear that they will not be able to undergo a green transition without the help of stronger economies.

International agencies have repeatedly echoed the need for greater financing in the world’s poorer countries to develop global renewable energy capacity, respond to the rising energy demand, and transition away from fossil fuels to fulfill climate objectives.

And yet, once again, their pleas are not being met, with a multitude of developed nations failing to live up to their promises. At present, around 81% of green investment is financed by the private sector in high-income countries, compared to just 14% in emerging and developing countries?

For hundreds of years, since the industrial revolution of the 1700’s and 1800’s, Europe and North America have been contributing heavily to the world’s greenhouse gas emissions.

It is only in recent decades that scientists have fully understood the negative impact that industrial activities and transportation have had on the planet, and called on countries around the world to reduce their carbon emissions.

Meanwhile, several developing nations worldwide have been responsible for only a minuscule percentage of these emissions due to a lack of industrialization.

Now, as developed nations have the privilege to be able to call for a green transition, some of the world’s poorer economies are expected to simply follow suit, at a time when they could be modernizing their economies through industry and fossil fuels sector.

We are seeing Europe scramble to meet its energy needs.

We are seeing a region in the world that was advocating not to fund further investment in fossil fuels in the developing world now begin to scramble around these same places for the very same resources that were to be taken off the table.

The hypocrisy of these actions demonstrates the injustice of the situation, as developed nations are asking weaker economies to focus on decarbonization over development – potentially forgoing their industrial and energy potential, as rich states continue to rely on fossil fuels and contribute heavily to carbon emissions.

And many of these countries cannot afford to publicly finance major new renewable energy projects, particularly as many developing state governments are in debt.

At the Summit for a New Global Financing Pact in Paris this month, developing nations called for a transformation of the global financial banking system. At present, at least 52 countries are in debt distress and are facing some of the worst climate emergencies in the world.

The summit was aimed at accelerating reform efforts to provide trillions of dollars in funding for climate change through a debt forgiveness/compensation plan. But by the end of the summit, little appeared to have been achieved.

Some progress was accomplished via reforms helping to address climate change, with aims for global taxes on shipping, aviation and potentially on colonial wealth to fund climate action.

However, climate campaigners believe little decisive action was agreed upon that would make a difference now. The World Bank has agreed to put debt repayments on hold for countries facing climate disasters, although only on new loans.

Meanwhile, Great Britain will do the same for existing loans to 12 countries in colonial Africa and the Caribbean.

A grant of $100 billion will be divided across low-income countries through an instrument known as special drawing rights (SDR’s), a form of currency provided by the International Monetary Fund, with financing coming from France, Japan, and Britain, among others.

The USA may contribute a further $21 billion if approved by Congress. But several state leaders are once again highlighting the inability to achieve net-zero emissions and support a global green transition without greater help from the world’s developed economies.

They expect developing countries like Malaysia to do it on our own which is not realistic. He added that developed nations have to understand that the transition takes time and takes investments and that they have to play their part.

A drastic step would be at the expense of our education, health and development. But in terms of commitment, it is there. The transition plan is there. The energy transition has started, has begun.

The International Renewable Energy Agency predicts that Malaysia will have to double its renewable energy transition investments to at least $375 billion to meet its 2050 net-zero emissions goals.

Meanwhile, India’s Prime Minister, Narendra Modi, has repeatedly called for greater support from some of the world’s richest countries to achieve India’s green transition.

India has huge renewable energy potential, as well as a massive population and rapidly increasing energy demand, and yet it does not have the funds to develop all its green energy potential.

In 2021, Modi called on developed countries to set a target of contributing at least 1% of their GDP to green projects in the developing world. Yet, India’s ambitious green transition roadmap remains highly underfunded.

Developed nations that underwent industrialization centuries ago have made their bed when it comes to carbon emissions, and yet it seems that low-income countries are expected to lie in it.

Several impoverished nations are now having to choose between developing their economies and funding a green transition, with richer economies offering little in the way of financing for a shift to green.

Unless major action is taken to support cleaner industrialization and the development of major renewable energy projects across the developing world, many countries are unlikely to be able to contribute effectively to the global green transition.

Oil Price.com / ABC Flash Point Colonial News 2023.