COP27 Update: African Leaders Say They Need Cash Not Cheap Loans

(Bloomberg) — South Africa’s President Cyril Ramaphosa said more climate funding needs to come in the form of grants and concessional loans, to avoid the continent ramping up debt.

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Ramaphosa called on multilateral development banks to change their approach to climate finance, saying support is out of reach for most of the world’s population. The institutions are “risk averse” and their funding offers “carry onerous costs,” he said in his speech at the COP27 conference.

Earlier, African Union Chairman and Senegalese President Macky Sall said developing countries are currently funding most of their climate change projects by taking on debts, as all of the support promised by rich nations has not come through.

“We are funding our own adaptation efforts when we the victims, which means we are being doubly punished and we are not ready to put up with that,” he said.

More than 100 world leaders are set to be in Sharm el-Sheikh over the next two weeks for the UN’s annual climate talks. They’re attempting to maintain momentum in the battle to curb planet-warming emissions.

This year, delegates are aiming harsh criticism at each other over issues ranging from climate reparations to funding for mitigation and adaptation in poorer countries.

Rising energy prices, accelerated by Russia’s war in Ukraine, have led many governments to prioritize security of supply over the transition to cleaner energy since the last COP summit in Glasgow.

German Chancellor Olaf Scholz, France’s Emmanuel Macron and British Prime Minister Rishi Sunak were among the biggest names to speak on Monday. US President Joe Biden and Brazil’s President-elect Luis Inacio Lula da Silva are due to appear later on.

The most notable no shows are China’s Xi Jinping and India’s Narendra Modi, leaders of the world’s largest and third-largest emitters.

Highlights:

  • Highlights from Monday

  • Is the 1.5C warming goal dead?

  • UK firms face new requirements to back up climate claims

  • Africa to expand the use of carbon offsets

  • Methane cloud spotted near New Mexico coal mine

  • South Africa launched an $8.5 billion plan to shift from coal to green energy

  • US to outline a CO2 credit plan for developing nations

Here are the latest developments. All times Egypt.

Carney Sees ‘Wall of Opportunity’ in Energy Markets (12:00)

Renewable-energy assets are primed for an era of growth as they emerge as the answer to both energy security risks and efforts to fight climate change, according to Mark Carney, the former Bank of England governor.

There’s currently a “wall of opportunity” in the renewable energy market, Carney, who co-chairs the Glasgow Financial Alliance for Net Zero, said in an interview with Bloomberg Television’s Francine Lacqua at the COP27 climate summit in Egypt on Tuesday.

“We’re seeing that a lot of the answer to energy security problems that have been exposed by Russia’s illegal war have to do with sustainability,” he said. “That’s why you’ve seen a five-fold increase in the ambition in the European Union for this decade. That’s why you’ve seen the big roll-out with the Inflation Reduction Act in the United States…these are solutions to not just climate issues, but geopolitical issues.”

Funding for ‘Bottom-Up’ Climate Action in the US Launched (11:27 am)

The US State Department and Bloomberg Philanthropies announced a new $3 million initiative to help cities, states and other regional entities steer toward net-zero goals.

The program, dubbed SCALE, or Subnational Climate Action Leaders’ Exchange, is being established with a matching, joint contribution of $1.5 million each. It will start by focusing on implementing the Global Methane Pledge, a commitment by more than 120 nations to collectively cut emissions of the potent greenhouse gas 30% by 2030.

In the US, action by the private sector and local governments helped the country dial down greenhouse gas emissions, even when former President Donald Trump pulled the nation out of the Paris Agreement and the federal government backed down from the fight against global warming. “The federal government has, many times, been asleep at the wheel,” said Michael Bloomberg, the UN secretary-general’s special envoy for climate ambition and solutions. Even so, a coalition of cities, states, businesses tribal nations and other institutions “showed the world the American people remain committed to fighting climate change” and “the power of bottom-up climate action.”

Michael Bloomberg is founder and owner of Bloomberg LP, parent of Bloomberg News.

South Africa’s Ramaphosa Wants Change to Lending Approach (11:50 am)

South Africa’s President Cyril Ramaphosa called on multilateral development banks to change their approach to climate finance, decrying the failure by developing nations to live up to promises to boost funding for climate adaptation and mitigation.

Multilateral support is out of reach for most of the world’s population, he said in his speech at the COP27 conference. The institutions are “risk averse” and their funding offers “carry onerous costs.”

More funding needs to come in the form of grants and concessional loans, he said.

Sall Urges Nations to Honor Funding Pledges, Not More Debts (11:15 am)

African Union Chairman and Senegalese President Macky Sall called on rich nations to honor their pledges to finance African countries vulnerable to climate change, rather than giving loans to the already heavily-indebted nations.

“Developing countries are currently funding most of their climate change projects by taking on debts, when they should be receiving funding from what we have together agreed,” Sall said in a speech at the climate talks summit in Egypt. “We are funding our own adaptation efforts when we the victims, which means we are being doubly punished and we are not ready to put up with that.”

Sall, a prominent African voice, used the stage to call for a fairer energy transition and a better access for Africa to development finance resources. Developing countries and small island states contributed a tiny amount to historical planet-warming emissions but have been battered by the impact. In recent weeks, they had stepped up demands for the issue to at least be discussed.

“Lets be clear we are in favor of reduction of greenhouse gas emissions but we Africans cannot accept that our vital interests be ignored as we undergo this energy transition. We are low emitters however we are the most vulnerable to loss and damage triggered by climate change.”

Poland Says Energy Transition Must Serve ‘Security’ (11:29 am)

Polish President Andrzej Duda used his plenary speech to stress the importance of energy security as the world grapples with higher prices.

“The transition is there to serve man, not the man to serve the transition,” he said in his address. “People are going to ask why the energy is so expensive. The transition has to serve energy security.”

Poland is the biggest coal producer in the European Union. It’s another example of an important theme in Sharm el-Sheikh. The idea that the transition can’t come at the expense of security of supply. Other argue that’s a false choice and cheaper renewables are the answer to the energy crunch.

Duda, one of Ukraine’s staunches allies, also took the opportunity to blame Russia’s aggression for the global energy crisis.

Botswana President Wants End to Project Financing (11:27 am)

Botswana’s President Mokgweetsi Masisi called for an end to project-based climate adaptation funding, saying that the scale of the challenge necessitated direct contributions to national treasuries.

Masisi’s words echoes pronouncements made by politicians from South Africa to Barbados for a rethink on how climate finance is channeled to the developing world.

China to Working on Tighter Climate Laws (11:00 am)

China is pushing forward amendments to national laws to help cut carbin emissions, Wang Yi of the Chinese Academy of Sciences, said.

There could be changes to 20-30 laws in China, with work accelerating after the people’s congress in March next year, he said.

Irish PM Calls for New Financial Tools (11:00 am)

Adaptation to climate change requires new tools for helping countries deal with weather disasters, Ireland’s Prime Minister Micheal Martin said in an interview on Bloomberg TV.

“Along with all of the measures we must take to reduce emissions, we also now have to look at adaptation, and create financial instruments in terms of dealing with catastrophic risk,” he said.

African Nations to Expand Local Carbon Markets (10:30 am)

A group of African countries including Kenya, Malawi, Gabon, Nigeria and Togo, together with Standard Chartered, are backing a new initiative to “dramatically expand” the use of carbon offsets on the continent.

It aims to produce 300 million credits annually by 2030, and 1.5 billion by 2050. Each credit will represent a metric ton of reduced, removed or avoided greenhouse gas emissions. Even 75 million credits would be double the total number issued across the entire of Africa in 2021.

World Bank to Launch Climate Fund for Poorer Nations (10:00 am)

World Bank President David Malpass will on Tuesday unveil a fund aimed at helping developing countries to cope with climate change.

It’s “a big trust fund” called SCALE, Malpass said in an interview with Bloomberg TV. “I think of it as a giant resource need that can be filled by grants from the advanced economies.”

Poor nations are struggling with a confluence of challenges, from rising prices and interest rates to the effects of climate change to a shortage in fertilizer, he said. He added that Russia’s invasion of Ukraine has exacerbated the problems.

Greece Targets Role as Europe’s Green Power Hub (9:35 am)

Greece wants to become a net exporter of renewable electricity to the rest of Europe, Prime Minister Kyriakos Mitsotakis said.

The nation is backing a plan to build cables that will bring green power to Europe via the country from Egypt and the Middle East. If such a project is successful, it would go some way to help the European Union boost supplies as everything from transport to heavy industries will use more electricity in the future.

UAE and Egypt Ink Pact for 10GW of Solar Power (9:30 am)

Egypt and the United Arab Emirates have signed a deal to develop 10 gigawatts of onshore wind power in Egypt. Abu Dhabi-based renewable energy firm Masdar is leading consortium to build the plant.

UAE President Mohammed bin Zayed and Egyptian counterpart Abdel-Fattah el-Sisi attending the signing.

EU Signs Forest Partnership with Five Countries (9:00 am)

The European Union signed a memorandum of understanding to help preserve forests in Guyana, Mongolia, the Republic of Congo, Uganda and Zambia. The bloc is set to pass legislation banning the import of products whose manufacture causes deforestation. But its demand for rubber has been criticized by non-profit organizations for contributing to trees being cut down in Africa.

Read more: Europe’s Rubber Addiction Destroys Africa’s Tropical Forests

Apple, Pepsi Join Promise to Buy Near-Zero-Carbon Metal (8:45 am)

PepsiCo, Apple and Rio Tinto are among the newest members of a corporate buyers club that has committed $12 billion to purchasing near-zero-carbon steel, aluminum and other products. Members hope to create greener supply chains and accelerating the production of clean technology.

The First Movers Coalition is also growing with new corporate pledges from companies such as automaker General Motors and Swedish power provider Vattenfall to buy next-level-green cement and concrete — at least 10% of their needs in 2030.

Taiwan’s Gogoro Sees India as ‘Holy Grail’ for EV Technology (8:27 am)

Taiwanese startup Gogoro sees huge scale for its battery-swapping technology in India, joining the race to get a slice of an electric vehicle market which is expected to reach 400 times its current size by the end of the decade.

“India represents the holy grail,” said Horace Luke, the chief executive officer, said to Bloomberg TV. The electric-scooter and battery-swapping-station maker is going to get its technology “honed, fine-tuned and calibrated to the India condition.”

Countries Set to Bolster Global Methane Pledge at Climate Summit (8:00 am)

The EU and US put methane on the map at COP26 in Glasgow — declaring the potent greenhouse gas a threat to Paris Agreement temperature goals and insisting emissions of it must be slashed 30% by 2030.

In the year since, European countries and the US have successfully encouraged more than 120 countries to sign on to a formal methane-cutting pledge, and at Sharm El-Sheikh, about 40 of them are set to outline their plans for doing so, according to a senior State Department official.

PWC Says Emissions Reductions Must Speed Up (7:15 am)

The goals set at the 2021 COP summit in Glasgow aren’t being met fast enough, according to PwC Chairman Bob Moritz.

“We sit at the table today, a year later, not seeing speed and scale of change” required to meet climate targets, he said to Bloomberg TV. “We need to move much faster. We have a long way to go.”

According to the accounting and consulting firm’s own analysis, emissions reductions globally have to happen 11 times faster than what’s been the case in the past two decades.

Japan Delays Carbon Tax Reform (4:00 am)

Japan is delaying plans to revise how it taxes carbon, the Nikkei newspaper reported, potentially slowing efforts to wean the country off fossil fuels.

The government will postpone the introduction of a new carbon tax that was planned for the fiscal year starting April 2023, the Nikkei said Tuesday without attribution. Policy makers decided it would add to already surging living costs, it said.

It’s at least the second time the changes have been pushed back. The environment ministry had requested the introduction of a more substantial carbon levy in the previous annual tax revisions, but the government backed away amid industrial protests.

Banks Fall Dangerously Short of Pledges in New Net-Zero (2:01 am)

Most banks that have published net-zero emissions targets are failing to live up to those commitments, according to a fresh study by ShareAction.

The majority of the 43 largest financiers of fossil fuels in the Net Zero Banking Alliance “have climate targets that fall short of what’s needed to prevent the worst impacts of climate crisis,” the nonprofit said Tuesday. Only 16% of the banks analyzed have set interim, overarching net-zero goals, ShareAction concluded.

UK Firms Face New Requirements to Prove Climate Claims (2:01 am)

The UK is set to require companies to provide granular details to back up their decarbonization claims, under a fresh proposal intended to stamp out greenwashing.

The government-backed Transition Plan Taskforce is seeking feedback on its disclosure framework, which requires firms to produce evidence of “concrete” short-term action taken to reduce their carbon footprints, according to a statement on Tuesday.

–With assistance from Alfred Cang, Stephen Stapczynski, Paul Tugwell, David Malingha and Alastair Marsh.

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