Climate change and poorer economies: some reflections after COPs 27 and 28

This paper reflects on the achievements but also some of the apparent gaps and other limitations of the action plans for the climate emergency emerging from COPs 27 and 28 in 2022 and 2023. It argues that these plans lack coherence about the policies most appropriate for poorer economies that are both likely victims of global warming but also richly endowed with those mineral and other resources critical for the net zero energy transformation of the next few decades. It is appropriate for such countries to lobby hard for enhanced amounts of climate finance – for adaptation, mitigation and loss and damage. However, the huge amounts of such finance argued to be necessary are unlikely to be achievable for many reasons that the COP papers themselves document. Poorer countries in particular—especially the most debt burdened countries in Africa cannot attract the significant private climate finance nor indeed raise the large budgetary contributions said to be necessary. The central contribution of this paper is its defence of the proposition that there is a strong case for shifting the balance of the arguments to favour a more active approach – by host countries supported by international agencies – to focus on the positive opportunities for investment, and sustainable growth associated with the huge endowments of critical metals, minerals, and natural gas found in lower income economies. To support this proposition, the paper documents the impressive scale of such resources; shows that they are often the single most important source of FDI; shows examples of how their thoughtful use can yield the triple win of reduced energy poverty (SDG 7); improved fiscal balances but also enhanced health outcomes. The paper also argues that in the context of a world where major oil, gas and metal producers are increasingly responding to pressures for more “climate sensitive” supply chains, these large investments in mineral resources can be consistent with a country’s overall agenda for a more energy efficient, low carbon future. Indeed, the extractive companies that are bringing these new investments are also likely to be a major source of new climate-related investments and “greening” technologies. Both the companies and host governments, in their policies for the sector need to factor in this new emerging reality. This paper does not suggest that the design and implementation of a successful extractives-led development strategy is in any way easy, nor that the problems are the same in all poorer countries endowed with minerals The differences in both the economic and political-economy situations of different countries are of course substantial. There are also important differences in the challenges facing counties with mostly hydro-carbon assets as compared to those with mostly metal and mineral assets. However, we know for sure that the contribution to global warming of almost all categories of lower income economies is vanishingly small. Hence the global climate agenda would face few risks and could realize substantial benefits by encouraging those countries richly endowed with mineral assets considerable flexibility in continuing in a responsible manner with the use of the various mined products with which they are richly endowed.