Hegemony in the green space

The 29th Conference of Parties (COP29) ended on November 24 in Baku (Azerbaijan) after more than 36 hours of scheduled closure. The next COP30, a yearly get-together of climate activists and proponents of ‘climate economy’ (’green economy included’), is scheduled to be held in Belém, Brazil in November 2025 with emphasis on global and regional environmental issues. After two weeks of tense negotiations at the UN climate summit (COP29), delegates approved an agreement on a new climate finance goal. The disappointing deal offered a meagre USD 300 billion from developed countries and other sources by 2035 to developing countries. The current commitment is at USD 100 billion a year. This resulted after a decade long discussions on a New Collective Quantified Goal (NCQG). The USD 300 billion amount was fixed despite the pressing demand of the G77 and China to allocate USD 1.3 trillion of funds as a part of NCQG. The Global South is home to over 6 billion people. On per capita allocation, it comes down to just USD 50 per person per year. Moreover, lack of clarity on whether the USD 300 billion would be grants-based or concessional loans raises concerns about the possibility of worsening debt burdens in the Global South.

It may be recalled that last year, the COP28 climate talks in Dubai began with a new fund to address the increasingly severe losses and damage vulnerable countries face from climate impacts and concluded with the first international agreement to tackle climate change’s main driver: fossil fuels. COP28 concluded with a final consensus that laid out an ambitious response to the Global Stocktake and put forward a plan to close the gaps by 2030. It called on Parties to transition away from fossil fuels to reach net-zero, encouraged them to submit economy-wide Nationally Determined Contributions (NDCs), included a new specific target to triple renewables and double energy efficiency by 2030, and aimed to build momentum behind a new architecture for climate finance.

However, in COP29, countries failed to reach a consensus on how or whether to acknowledge the outcome from last year’s climate summit, which called for nations to transition away from fossil fuels. The issue was ultimately kicked to future negotiating sessions.

Fossil fuel dominates the world energy mix

Even though during the last three decades, hundreds of conferences like COP have been organised across the globe to reduce the use of fossil fuel which is considered as the major culprit for global warming, tables 1& 2 reveal that fossil fuel (oil, natural gas and coal) still dominate the world’s energy mix. In 1993, the contribution of these fuels in the total primary energy consumption of the world (376.48 exajoules) was 80.4 per cent and after three decades, fossil fuels’ share in the total global energy consumption (619.63 exajoules) has gone up to 81.5 per cent. During this period, the share of renewables (all types) has increased to 8.2 per cent from 7.1 per cent. The contribution of nuclear energy has declined to 4 per cent from 5.6 per cent. The Fukushima nuclear accident (2011) might have impacted the nuclear industry, raising the safety issue.

Table 1 also reveals that the contribution of renewable energy in 2023 reached 9.4 per cent of its total energy consumption from 4.5 per cent in 1993. China has emerged as one of the major players in the global renewable energy market. In the case of India the share of fossil fuels in the total energy consumption in 2023 was as high as 89.34 per cent. In 1993, the corresponding share was 84.5 per cent.

Table 1 also reveals that Europe has reduced the use of fossil fuel during this phase of transition. Share of coal has come down from 20.8 per cent to 10.8 per cent and the share of renewables has gone up from 6.8 per cent to 15.2 per cent. However, it is alleged that using the clean development mechanism (CDM) of Kyoto Protocol, Europe has transferred a large section of their carbon emitting ‘dirty’ industries to the developing countries which are considered as ‘carbon havens’. Now the European Union has proposed to impose a carbon tax on the imports from developing countries which will put the exporting countries at a disadvantage vis-a-vis EU domestic products.

Table 2. reveals, China now contributes 31.9 per cent of the global carbon dioxide emission from energy. In 1965, its contribution was merely 4.3 per cent. USA’s share in the corresponding period has declined from 30.8 per cent to 13.2 per cent. Table 2 also reveals that during 2013-23 carbon dioxide emission rate per annum declined in the USA and Europe. In the case of Europe the decline was significant at 2.2 per cent. In case of global emission the rate of increase was 0.7 per cent per annum.

Disappointment for the Global South

Developing country representatives left the Baku summit deeply disappointed and frustrated as the wealthier countries didn’t put more money on the table. According to the UNFCCC’s (United Nations Framework Convention on Climate Change) Second Needs Determination Report (NDR)—a report on the determination of the needs of developing country Parties related to implementing the Convention and the Paris Agreement—a cumulative USD 5.012-USD 6.852 trillion is required until 2030 to support developing countries in achieving their nationally determined contributions (NDCs). The climate activists of the Global South pointed that the gap in adaptation finance alone stands at a staggering USD 194-366 billion per year.

It is reported that the negotiators were demanding that USD 600 billion of the USD 1.3 trillion should be public grant or grant-equivalent finance, which essentially puts the responsibility of adaptation and mitigation on the historical polluters. Instead, the text “calls on all actors” to enable scaled up climate finance for developing countries to at least USD 1.3 trillion per year by 2035 and encourages developing countries to contribute towards this target on a voluntary basis, reports Down to Earth.

Engineering a climate economy

Since the 1970s, developed countries (and their TNCs), have lost their oligopolistic control on oil. OPEC power has changed the energy equations of the world. Till the late eighties, developed countries could not counter OPEC power mainly for two reasons: (i) major accidents in the nuclear plants–one in 1979 at the Three Mile Island (USA) and the other in 1986 at Chernobyl (USSR)— halted the growth of nuclear energy which was considered by a section of energy policy experts a viable alternative to fossil fuel, (ii) The Soviet Union with its huge oil reserve was not prepared to align with non-communist developed countries- most of which were NATO member

Though coal was found abundantly throughout the world, most of the countries shifted to oil after the 2nd World War. Between 1950s and 1970s, the seven major oil TNCs (the Seven Sisters) who dominated the world global petroleum market till the rise of OPEC power, played a crucial role in this shift from coal to oil.

Oil TNCs could control the world petroleum market over a fairly long period mainly due to their technical edge over others. The technique of coal production was known to almost all over the world but the technique of oil production was unknown to most of the developing countries for a long period. Technology was one of the major tools which helped advanced countries to maintain their dominance over developing nations. It was feared that high crude price may compel the developing nations to return back to coal. Indication to this effect was already there. China was planning to fuel its rapid economic expansion almost entirely through its large coal reserves.

In the energy crisis of the 1970s, the most affected developed countries were Germany, Italy and Japan. USA with the help of its major oil companies and long term crude supply arrangements with influential OPEC members strengthened its position in the power struggle vis-à-vis Europe and Japan. In the Gulf war (1990-91) also, the USA was the ultimate winner.

To avenge this, few developed countries (mostly from Europe), with practically exhausted oil reserves, tried to put the US and its oil corporations into disadvantage. The campaign against global warming offered an opportunity to destabilise the US oil sector. They anticipated that due to the global warming campaign, demand for fossil fuel will decline worldwide. The US oil TNCs, which had a very large stake in the petroleum industry, would have to bear the cost of warming the globe. At the Rio Earth Summit (1992), Europe took an early lead in advancing plans to help developing nations to combat climate change. The UN Framework Convention on Climate Change (UNFCCC) was formed in the Earth Summit.

UNFCCC, which was created during the Earth Summit of 1992 to address the climate change issue, entered into force in March 1994. It organises an annual meet of the member nations known as Conference of Parties (COP). The 1st COP was held in Berlin, in 1995. In their third annual meet (COP3) at Kyoto, Japan, in 1997, UNFCCC agreed to a Protocol on reduction of greenhouse gas emission. President Clinton signed the Kyoto Protocol in 1998, but President Bush reversed the earlier US position and effectively ended US involvement in 2001 because he thought that in its current form, the Kyoto Protocol would “severely damage the United States’ economy”. The Bush administration also had reservations to ratify a treaty that did not equally obligate developing countries including India and China. The incumbent US President also has similar views on climate issues like his predecessor.

Observations

Trans National Corporations (TNCs) of the developed countries have successfully weaponised the climate crisis in retaining their hegemonic control on the global economy. Using Montreal Protocol, Kyoto Protocol (COP3, 1993) and Paris Agreement (COP21, 2015), a huge climate economy, comprising Green and Clean Technology, Emission Trading System (ETS), Carbon Tax, Global Methane Alliance, has been created. COPs have helped to create it using the UNFCCC platform and linking climate changes primarily to anthropogenic factors. It may be mentioned that the Paris Agreement aimed to reduce the emission of gases that contribute to global warming. The Paris Agreement set out to improve upon and replace the Kyoto Protocol, an earlier international treaty designed to curb the release of greenhouse gases.

COP29 has adopted Article 6 of the Paris Agreement, which establishes frameworks for voluntary carbon markets. While the Supervisory Body overseeing Article 6.4 is tasked with ensuring high standards, concerns remain over the potential flooding of markets with low-quality credits from the Kyoto Protocol’s Clean Development Mechanism, commented a climate activist associated with CSE. Unfortunately, business negotiators, not climate activists, take the lead in the climate negotiations.

To a military strategist of the last century when nation states were eager to retain their sovereign power, weather was a potential weapon. (See, Weather Weapon, N Shesagiri, 1977). In the 21st century, when the role of the nation states is being redefined, the strategic importance of weather may have changed.

In this new century, the TNCs are playing a more important role than the sovereign nation states, in developing rules and regulations of different multilateral treaties, pertaining to important issues like climate change, intellectual property rights etc (Dey 2006). The power of the nation states is eroding very fast. The TNCs with the help of mainstream global media, on which they have almost total control, are capable to systematically establish or suppress any ‘scientific’ view, which are important for their strategic planning. Under this changed power structure, old strategies and tactics are bound to change. ‘Climate’ , which had a strategic importance as ‘weapon’ to a nation state during the cold war period, has attained a strategic importance of different type (as ‘economic good’) to a TNC dominated world order. Now the emphasis is more on economics than politics. The paradigm shift is very clear and distinct.

As the objective of creating a climate economy has been achieved, relevance of yearly COP meets has lost. Failure of the last three COP meets in Sharm El-Sheikh, Egypt, Dubai, UAE and recently in Baku, Azerbaijan, are cases in point. Writing in The Guardian the president of COP29, Mukhtar Babayev, criticised developed countries for the fractious end of COP29, and claimed that China would have offered climate finance voluntarily if rich countries had shown more of a lead. At Cop29, rich countries demanded that the donor base should be broadened to include emerging economies such as China, India and petro states such as Saudi Arabia. Babayev noted that it took pressure from the presidency to force the EU to increase its deal beyond the originally proposed USD 250bn. China is classed as a developing country under the UN climate process, which means it carries no obligation to provide finance to poorer countries, while the rich economies do.

While engineering the climate economy, Europe and Japan probably failed to anticipate the emergence of China as their competitor in the global power structure. During the last three decades China has destabilised the game plan of Europe to emerge as the dominant power and regain its lost colonial glory. In 1999 EU launched Euro to end the hegemony of the US dollar by linking global warming with burning of fossil fuels. Chronology of events initiated by European leaders like Helmut Kohl and Francois Mitterrand in the late eighties and nineties, led to the creation of a new economy leveraging upon climate changes.

Meanwhile during the last three decades China has emerged as a major player in the climate economy. In near future they might change the rule of the game to reap the maximum advantage.

Views expressed are personal