Why we need to rethink geo-economics to beat climate change

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum. Author: Abhinav Chugh, Content and Partnerships Specialist, Strategic Intelligence, World Economic Forum

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On Mousuni Island – a part of the Indian Sunderbans with a rich ecosystem and UNESCO World Heritage site status – the climate crisis has already threatened to push its approximately 13 million people and the endangered Bengal tiger to their limit. Within the 4,000-square-mile archipelago, 70% of the land is just a few feet above sea level. In some parts of the region, the sea is already advancing about 200 yards a year, causing residents of Mousuni Island to leave entirely and putting them on the frontline of the climate crisis.

Climate change has landed and is taking human life, undermining livelihoods, destroying infrastructure, shaking national economies and stressing state budgets. According to a new SIPRI report, climate change is transforming and redefining the global security landscape and the implications of climate change for peace and security have become increasingly embedded within the security discourse.

The economic imperatives of industries to help raise living standards and global economic interdependence are increasingly threatened by climate change too. Take Ghana and the Ivory Coast, which account for roughly 19% and 45% of global cocoa bean production respectively, according to data from the International Cocoa Organization (ICCO). On July 16 2019, the two nations gave in to pressure from the global chocolate industry and lifted a month-long ban on cocoa sales that was meant to push international buyers to accept a new minimum pricing agreement.

The move may slightly boost earnings for West African cocoa farmers in the short-term, but it is so far from the $2,600-a-tonne minimum price for which Ghana and the Ivory Coast were angling that the negotiations have been largely considered a defeat in both these nations. This is especially painful in the Ivory Coast which has experienced massive deforestation owing to the global demand for chocolate.

As per a recent piece by World Economic Forum Founder and Executive Chairman, Klaus Schwab, we need to develop scorecards to track our performance on achieving long-term priorities relating to the Paris Accord and the SDG and rethink GDP as a key performance indicator (KPI) in economic policy-making.

We can still do much more to protect and restore forests in order to combat climate change. Too many policy-makers still harbour the misconception that economic development and climate action are incompatible. Outside of violent conflict, broader competition has emerged over geo-economics. This is not a Cold War or trade tension struggle to export a universal ideology, but, as in the Cold War, economic assistance is once again seen by the powers that be as a vehicle for geopolitical influence. Across Latin America, Africa, and Asia, investments in infrastructure, energy, and technology are beginning to turn from domains of relative G20 cooperation into spaces for great geo-economic competition.

Despite this, there are some countries leading by example. In 2015, Gabon and five neighbouring countries established the Central African Forest Initiative (CAFI) with the aim of recognizing and preserving the value of the region’s forests, which together form the second-largest tropical forest in the world, storing 70 gigatonnes of carbon and providing livelihoods for 60 million people. The Congo Basin may be only one-third the size of the Amazon, but it stores 60% of the amount of carbon that the Amazon does and its annual carbon sequestration is proportionately higher.

CAFI is currently seeking to build on previous successes by making more ambitious commitments, improving coordination across existing initiatives, and bringing in new partners and donors. In that regard, the recent $150-million agreement between Norway and Gabon, facilitated by CAFI, is a significant step in the right direction. Under this 10-year deal, Norway will pay Gabon a floor price of $10 per certified tonne for reducing greenhouse-gas emissions caused by deforestation and degradation, as well as for absorption of CO2 by natural forests. Wales has similarly planted 10 million trees in Uganda.

It is only right that advanced economies provide additional technological and financial assistance to help developing countries address the growing climate crisis. Worsening climate change will have impacts on global politics, creating new vulnerabilities as well as opportunities. Emerging countries with their changing power status and high vulnerability to the effects of climate change play a vital role in global climate action.

The Pacific Resilience Project, along with the Green Climate Fund (GCF), is one example of a plethora of initiatives around the world, from low-carbon energy systems to drought-resilient agriculture, that require some type of financial assistance if nations stand a chance of avoiding the most dangerous consequences of a warming globe. This year the GCF, which was pledged an initial $10.3 billion and is running out of money, needs wealthy nations to refill its coffers. Meanwhile, countries are now discussing a new promise to low-income nations, something that they have committed to deciding before 2025. The UN’s Intergovernmental Panel on Climate Change (IPCC) says that an annual investment of $2.4 trillion until 2035 is needed in the energy system alone if we are to limit temperature rise to below 1.5 °C from pre-industrial levels. That figure equates to around 2.5% of the world’s economy.

We are at a critical juncture where the next big wave of a migration crisis and civil unrest will be triggered by the climate crisis and climate insecurity. We are already seeing large swathes of instability in 2019 aggravated by a wide range of socio-economic issues. To learn from past trends – such as how a generational drought preceded the Syrian civil war or how social contracts built upon fuel subsidies resulted in the supply of basic public services going awry and preceded protests in Chile, Lebanon and Ecuador – we need to restructure global economic interdependence and take a long-term view on green and clean investments in public infrastructure and utilities to ensure socio-economic stability. We need to adopt a long-term view as a narrative.