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Staving off default: How unsustainable debt is threatening human progress
Three-fifths of the world's lowest income countries are debt distressed and in danger of default. Navid Hanif, assistant secretary-general for economic development at the United Nations, tells GZERO's Tony Maciulis that we need to make debt more sustainable by restructuring it. Hanif believes multilateral development banks, such as the World Bank, should offer affordable longer-term loans with lower interest rates to allow least developed countries better opportunities to deal with crises like climate change, poverty, and educating children.
During a conversation at the World Bank/IMF spring meetings in Washington, DC, Hanif explains how a financial divide will eventually become a development divide, which is not good for the world. He explains the urgency of the growing debt problem.
However, Hanif also expresses optimism about the potential for progress coming after years of the pandemic, citing the growth in people gaining access to the internet and a renewed commitment to climate goals.
The world’s largest plastic waste pyramid is revealed in Egypt ahead of COP27 in Sharm el-Sheikh.
What to expect from COP27: “It’s pretty grim”
Last year’s COP26 summit in Glasgow, Scotland, where central governments and the private sector worked together in unforeseen ways, gave us reason to hope for climate progress. Nearly 200 countries gathered to agree on details of the Paris Agreement with an eye toward limiting global warming to 1.5 degrees C. This year was meant to be all about implementation.
But in the last 12 months, the world’s been rocked by war in Europe, soaring inflation, and deepening political and economic divides between rich and poor countries. As world leaders descend this weekend on the Egyptian resort city of Sharm El-Sheikh for the COP27 climate summit, climate warriors are wondering what can be done at this pivotal moment to save the planet.
We spoke with our very own climate expert, Eurasia Group’s Vice Chairman Gerald Butts, for a reality check on the goals and possibilities for this year’s COP27. The interview has been edited for length and clarity.
Last year's COP26 produced some highly ambitious goals. What kind of progress has been made thus far on those goals?
Not a lot, unfortunately. I think that most governments have been distracted by the economic fallout from the war, and those directly involved in the war have been distracted by that. So I think it's been a suboptimal year, to say the least, in climate progress, with the one notable bright spot of the Inflation Reduction Act in the United States, which is the first serious stab at tackling the US domestic emissions problem that we've seen. So one big bright spot, and a lot of backsliding
What are the broad goals for this year's conference? What would success look like?
The advanced billing was that it was going to be an attempt to knit together north and south. And, unfortunately, I think the fault line between northern wealthier countries that emit a lot and the developing world, which historically has not emitted a lot, is going to be bigger than ever in Egypt and that will probably feature prominently in the daily coverage. There will be a big focus on climate finance and greenwashing — expect a bunfight on this front.
To what extent has the war in Ukraine impacted global climate goals?
I think the war in Ukraine will ultimately expedite the energy transition from fossil-based energy to renewables. But in the short term, there's no doubt that it's leading to an increase in the use of fossil fuels to create energy, particularly in Europe. And the most pernicious aspect of climate change emissions is that they persist for a long time in the atmosphere. So you're seeing a lot of coverage where people are saying, “these are temporary increases in emissions in Europe,” but they're not temporary to the atmosphere. That's the key point. They may ramp back down in a couple of years, but the consequences will be there for a very long time.
Do you expect that to shift at all in the coming year? What is the outlook for Europe’s transition away from fossil-based energy?
I think that the geopolitics of Russia's energy leverage over Europe has brought into sharp relief for European governments how ill-advised that was in the first place. And given that Europe does not have a large domestic store of fossil-based energy, it's underscored how important the energy transition away from fossil is in Europe. And European policymakers have really latched onto it. They're going to spend a lot of money to execute it, and it's going to be an expensive fast transition as governments try to manage large increases in energy prices in the short term. There's no doubt that the energy transition is happening and that people underestimate how disruptive it's going to be. The countries that are trying to push fast forward on an energy transition will endure the price spikes. So in a nutshell, it's going to be a lot bumpier than people expect it to be, and it will eventually happen, but there will be a lot of political fallout and turmoil.
Last year, the US and China signed a joint declaration on Climate Action. Is that cooperation in jeopardy today? And what does that mean?
Oh yeah, big time. I think it's part and parcel to the larger structural change in the US-China relationship, where they both see each other primarily as competitors rather than as strategic partners. In the past, the climate as an issue had been set aside from that change, but it's inevitably been sucked into that maelstrom.
This means you don't have the top two emitters and two largest economies cooperating any longer on climate change. I think it's become, for both countries, a field of competition rather than cooperation, which is again something we've been saying was inevitable at Eurasia Group Asia for a long time, but you're seeing it in full force now.
One of the biggest-picture issues that'll be in the background of every conversation at COP27 is the global competition for the rare earth minerals that go into making up the battery supply chain for everything from electric vehicles to storage for electricity grids. The Chinese are way ahead, and the North Americans — including Canada and Mexico — have lately stepped up their efforts to catch up. But we see this as a resource race where large dominant economies are competing with one another to secure a long-term supply of critical minerals that they think will be of strategic economic and security value over the mid to long term.
What other contentious issues will COP27 participants face?
I think the big issue is — and this was brought into sharp relief with the floods in Nigeria and Pakistan — that the developing world is saying, "We didn't cause this problem, but we're dealing with its most severe consequences, and under the loss and damage provisions that the north has signed onto repeatedly, but failed to deliver on, it's time for you guys to pay up.” And the north is going to show up without a lot of money.
As a veteran of several COPs, that's a dynamic that you see all the time, and I think the patience is wearing thin in the south, especially as they see all of this investment get sucked into the United States because of the IRA.
What do you think of Egypt playing host? How will that go down?
There's going to be a lot of bad publicity for Egypt during the course of the COP, in particular on political freedom issues. There are organizations trying to highlight the prevalence of political prisoners in Egypt. And of course, Sharm El Sheikh itself is known as a playground for wealthy Europeans and Middle Easterners. In some ways, having it in an African country so close to Europe is inviting comments on the global divide between north and south.
And finally, where does the world stand on climate targets, and what is your biggest fear?
Everybody’s way off their targets and a lot of very hard heavy lifting is required to get us anywhere near keeping 1.5 degrees alive. And right now we're somewhere in the mid-2’s depending on which projection you look at. And you only need to look around the world to see the manifestations of 1.2 degrees of warming, which is where we are, to know that the next 20, 30, 40, 50 years are going to be really difficult ones, in particular for people who live near the equator, which is most of humanity.
What worries me most is that we're entering a world where even the wealthy countries that can, to a certain extent, use their wealth to insulate themselves from the most severe impacts of climate change, aren't really doing it. It requires us in democratic societies to do things that we're historically not very good at, which is to think long-term on things like infrastructure and to make investments accordingly.
What keeps me awake at night is the migration crisis. I think that a combination of adverse heat events, flooding, and sea level rise will create numerous migration problems over the next 20 years that we have shown ourselves as a global community singularly inept at dealing with.
Sorry to be a downer, but it's pretty grim out there.
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Africa needs reachable climate goals, says DRC lawmaker Jeanine Mabunda
Africa is barely responsible for today's climate crisis, yet African governments are being asked to stop using fossil fuels like everyone else. That just won't work, says DRC member of parliament and former speaker Jeanine Mabunda Lioko, unless rich nations make good on their climate finance pledges for the continent. Africa, she explains, needs "concrete and reachable goals" that provide access to reliable energy, and there will be a lot of pressure to deliver on promises ahead of the next COP climate summit, which will take place in an African country.
Mabunda spoke during a live Global Stage event, "Climate Crisis: Is net zero really possible?" Watch the full event here.