'Turning the page on fossil fuels': the goal that should unite the world

The war taking place in Ukraine and the fighting in Gaza, following the Hamas terrorist attack on October 7, should not distract us from our collective priorities: reduce CO2 emissions, seek carbon neutrality by 2050, preserve biodiversity and fight poverty and inequality.

This is the doctrine that France leads internationally, through the Paris Pact for People and the Planet and the One Planet summits. The cornerstone of our strategy must be to accelerate the ecological transitiona, as well as the fight against poverty, since it is evident that no country will help protect the planet if the cost of doing so leaves its citizens in a socioeconomic dead end.

The world's most advanced economies, which have also been the main emitters of CO2 since the Industrial Revolution, must abandon fossil fuels. It is a non-negotiable requirement if we want to meet the objectives of the Paris Climate Agreement. Science has already pointed the way: we must abandon coal by 2030, oil in 2045 and gas in 2050. The G7 countries have the greatest responsibility, but the full commitment of China, which is now the second largest emitter in history, is also needed.

The threat of coal is the first one we must face. The 2,000 gigawatts (GW) of installed capacity currently emit enough CO2 to exceed 1.5°C of global warming. The International Energy Agency recommends retiring 92 GW per year, but there is 500 GW of additional capacity planned.

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Although the G7 has the responsibility to abandon coal by 2030 (France will achieve this in 2027), Today the largest consumers of coal are emerging economies. In these countries it is necessary to accelerate the financing of renewable sources, as well as that of nuclear energy, which, being a manageable and decarbonized energy source, must play a fundamental role.

Other strategies

We also have to put international trade and private financing at the service of the Paris Agreement. The cost of investing in the fossil sector must be increased. We need different interest rates for green industries and for polluting ones.

We must also include a climate clause in trade agreements, because We cannot demand that our industries decarbonize and at the same time support the liberalization of international trade in polluting products.

It is necessary to create conditions that allow the most vulnerable countries to finance their mitigation and adaptation efforts against climate change and access green technologies that are the new engines of growth. This means transcending the traditional concept of “official development aid” and doing for those countries what rich nations did for themselves during the pandemic. of covid-19: carry out a heterodox fiscal and monetary policy.

We already have results to show: In two years, following the initiative adopted in Paris in 2021, we have released more than $100 billion in special drawing rights (SDR, the reserve asset of the International Monetary Fund) for vulnerable countries. By activating this “dormant asset,” we are providing twenty-year loans at rates close to zero percent to finance climate action and pandemic preparedness in the poorest countries.

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We have begun to change the financial rules so that These countries can suspend the payment of their loans to face catastrophic climate events. And we have changed the mandate of multilateral development banks (for example, the World Bank) so that they can take on more risks and mobilize more private funds.

Loss fund

We will continue working in this direction, also within the framework of the new fund for losses and damages, where we must mobilize new private insurance mechanisms against climate risk. We will start with the specific needs of the most affected countries.

During the first half of 2024, France and Bangladesh will sign an agreement to finance climate change adaptation measures and repair of loss and damage; The French development agency will contribute 1 billion euros ($1.1 billion) in investments and the International Monetary Fund (IMF) will provide up to 1 billion dollars in SDR for new loans.

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This also involves identifying global governance mechanisms for the most crucial challenges we will face in the coming years, of which one of the most pressing is access to water. In this sense, France and Kazakhstan will convene a One Water summit during the United Nations General Assembly in September 2024.

Furthermore, we must emphasize clay the foundation for a “bioeconomy” that remunerates the services provided by nature, our best technology for large-scale carbon capture. Countries that have the most important carbon and biodiversity reserves, especially in the three main tropical river forests, must obtain many more resources (calculated for each country separately) in exchange for the stewardship of these vital reserves. France launched three such contracts at COP28, with Papua New Guinea, the Republic of the Congo and the Democratic Republic of the Congo.

Furthermore, a reform of the carbon emissions market is essential. We have to create an international system for the voluntary exchange of carbon and biodiversity credits between government and private actors, with rigorous regulations that prevent ecopostureo (marketing strategy with which companies show their environmental commitment), and remunerate local communities.

The ocean is the most important carbon sink and we must protect it. France and Costa Rica will convene the third United Nations Conference on the Oceans, in Nice, in June 2025, with the objective of update international law, including banning plastic pollution and the protection of deep waters and seabeds. These reforms will also allow the development of national strategies for the protection of coastal areas in countries with exclusive economic zones.

Finally, There will be no chance of success without a reform of the World Bank and the IMF, which play an important role in setting standards and financing the green transition at the global level. Eighty years after their creation, these institutions are still underfunded relative to the size of the global economy and population, and their governance model still excludes emerging and developing countries.

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But we will not be able to agree on objectives and financing mechanisms until that all countries participating in the negotiations do so under equal conditions. That is why we must review the governance model of the Bretton Woods Agreement and ask emerging countries to assume their share of responsibility in financing global public goods.

EMMANUEL MACRON
France's president
© Project Syndicate
Paris