How Joe Biden can help save the planet at COP27

Joe Biden and other rich country leaders will get a lot of criticism from poorer countries when they arrive later this week at the UN climate conference in Egypt, COP27. But if the U.S. president unites his policies on geopolitics, trade and climate, he can change the narrative.

Biden can push the Just Energy Transition Partnerships (JETP), which aims to accelerate the decarbonization of developing economies, with countries such as India. This will promote Western interests while saving the planet.

The countries of the Global South will rightly criticize the rich for once again reneging on their promise to give $100 billion a year in climate finance. The US deserves the lion’s share of the blame.

States like Pakistan will also complain that they are already suffering the consequences of climate change despite having done little to cause it. Again, the US deserves most of the criticism, although other rich countries and China are also major culprits.

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Many countries, both rich and poor, are also unhappy with the Inflation Reduction Act, Biden’s landmark climate legislation. It’s great that the White House is subsidizing the deployment of green technologies at home. But this legislation also has protectionist overtones, as it encourages domestic production at the expense of foreign manufacturers.

Biden risks alienating potential friends, while stressing the importance of alliances to contain China. As the U.S. reduces its dependence on rare earths, solar panels and similar Chinese-made products, it need not manufacture all of it domestically.

It will be cheaper to spread production among friendly countries according to their comparative advantage. That is the goal of “friendly offshoring,” a plan to create trade links with allies, which has been advocated by Treasury Secretary Janet Yellen. Does Biden’s left hand know what the right hand is doing?

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The U.S. and other rich countries have a number of policies that could accelerate just transition in the Global South. They now need to be brought together in a coherent package. The G7 has created a $600 billion partnership for infrastructure and investment in the developing world as a green alternative to China’s New Silk Road.

South Africa announced at the 2021 climate conference the first JETP, an $8.5 billion partnership with rich countries that is supposed to unlock huge amounts of private capital. Indonesia, Vietnam and Senegal could unveil their own collaborations this month. One with India is also in the works, although it will take longer.

The US and its allies have pressed the World Bank and other development banks to better use their balance sheets against climate change. This is a first step toward raising the vast war chest needed to finance just transitions. Rich countries will have to use more public finance to attract trillions in private capital.

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The geopolitical risk of inaction is enormous. If rich countries do not push for just transitions in the Global South, developing countries will not accept being trapped in poverty. Some will turn to China. Others will take the dirt road to development. And millions of their citizens will flee to rich, colder countries to escape poverty and climate catastrophe. That will fan the flames of intolerant nationalism in Europe and the US.

Developing countries don’t just want to fight climate change. They want to get out of poverty and create good jobs. It is in America’s interest to help them. That means opening up trade opportunities and transferring technology, as well as investing in their green industrial revolutions. Of course, it will cost money. Developing and emerging economies, excluding China, need $1 trillion a year in investment, according to the Rockefeller Foundation. Most of it will have to come from private investors, although rich countries should use more public money to push it. But that investment can be very profitable. And the cost is negligible compared to fighting a cold war, let alone a hot one, with China.

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The JETP with South Africa focuses on energy. The country produces and consumes large amounts of coal. It therefore needs help to close mines and thermal power plants, retrain workers and grow renewables. Energy will also be at the core of other JETPs. Indonesia produces and consumes a lot of coal, and Vietnam is a big consumer. Others, like Bangladesh, suffer from being too dependent on fossil fuel imports. Europe now pays more for gas, and there have been widespread blackouts in the Asian country, which needs help to accelerate renewables.

But energy is not everything. Countries also need to transform agriculture, transportation, heavy industry and construction. And they need help adapting to the ravages of climate change. Lula’s election as Brazil’s president is a great opportunity to save the world’s rainforests and make agricultural practices more climate-friendly. Forestry and land use must also be central to partnerships with Indonesia and the Democratic Republic of Congo.

India, the third largest emitter of greenhouse gases, is the best example of why joined-up thinking is needed. It uses a lot of coal because it produces very little oil and gas. Narendra Modi also has big aspirations in solar or green hydrogen. The prime minister wants to export them, as well as use them at home. India sees the opportunity to displace China in some of the supply chains of the green industrial revolution. And it has several big industrialists, such as Gautam Adani and Mukesh Ambani, who are betting big on it.

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If the US and other rich countries negotiate an economy-wide transformation with India, they will kill two birds with one stone: climate and China. When Biden leaves COP27, he will go to Indonesia to attend the G20 summit. Now is the time to think big and act boldly.

Source: https://cincodias.elpais.com/cincodias/2022/11/07/opinion/1667819961_988047.html