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COP28: Is Fossil Fuel ‘Phase-out’ Fair for Developing Countries?

This article is part of the series of posts by writers from partner publications of the Warwick Economics Summit. This piece was written by Catherine Tait, a writer for the Wessex Scene, the University of Southampton's student-run media outlet. More articles by Catherine and other Wessex Scene writers can be read at https://www.wessexscene.co.uk.


The 28th edition of the COP summit has sparked plenty of debate. Aside from controversies surrounding the fact that the host country, the United Arab Emirates, is a key oil producer, and the summit president Sultan Al-Jaber is the CEO of its national oil company, the proposal to completely scrap fossil fuels has ruffled many feathers. The UAE’s statements on the debate have been mixed so far. While its environment minister Mariam bint Mohammed Almheiri voiced support for the eventual ‘phase-out’ of fossil fuels, Al-Jaber also called for ‘pragmatism’ in transitioning from fossil fuels to renewable energy. This implies that fossil fuel extraction should be allowed to continue, while capacity for renewables is increased.



The UAE isn’t the only country to call for such ‘pragmatism’, however. The Cuban ambassador Pedro Luis Pedroso Cuesta is concerned that fossil-fuel ‘phase-out’ will negatively impact the fight against poverty. This raises an important question. Since Western countries have used vast quantities of fossil fuels to industrialise and are thus historically more responsible for the climate crisis, is it fair for developing countries to deny them the same development path? Can this ever be a ‘just transition’?


For certain, countries whose economies are reliant on fossil fuels will suffer dramatically if they can no longer tap those resources. In Nigeria, for example, national income generated by oil is nearly 3 times greater than the total Official Development Assistance granted to sub-Saharan Africa. And while a transition to renewables might seem feasible in European countries where few people rely on the industry for jobs, the same cannot be said of countries which are still industrialising. For them, filling the gap in employment left by the fossil fuel economy will require much more money and effort. Furthermore, the lack of diversification is not necessarily due to a lack of interest – various states, including wealthier ones such as Saudi Arabia, have had economic diversification as a policy priority for years, but have never managed to do so properly. Other sectors simply don’t match up in terms of competitiveness, so breaking free from dependency often just doesn’t seem financially viable.


Admittedly, it is debatable whether current profits from oil, gas, and coal go to improving the lives of extractor countries’ citizens. Many of the extraction projects in developing countries are funded by G20 nations, and it’s those countries that usually reap the greatest profits from fossil fuel extraction. The profits from fossil fuel production this way do not go to improving access to electricity and transport in the country of extraction, but rather to the wealthy, fuel-hungry investor countries. Even in cases where it is more profitable for the exporting country, revenue often lines the pockets of government elites. Yet either way, taking away a country’s main source of income, however small their people’s proportion of the profits may be, can hardly help matters for the country’s poor.





The environmental impacts of continued extraction should not be ignored, however. Other developing countries at COP, such as the small island state Tuvalu, have argued for a phase-out to protect them from the disproportionate damage they will suffer if temperature rises are not kept below 2 C. Indeed, the International Energy Agency made it clear in 2021 that further investments in fossil fuel extraction will prevent us from reaching net zero by 2050. While world leaders often bring up the possibility of using Carbon Capture Systems to get rid of emissions rather than reducing emissions from fossil fuels themselves, various people, including the former UN climate chief Christiana Figueres, have raised doubts over whether such systems could be used at a large scale. Therefore, the implementation of carbon capture technology should not currently be used as an excuse to keep drilling, because at the moment it can only be used as a minor part of the path to net zero. So, whether some countries like it or not, fossil fuel production needs to stop soon to prevent further aggravation of the climate crisis.


This leaves developing countries in a challenging position. On the one side, financial ruin, on the other, environmental ruin. What thus becomes clear is that wealthy countries, who can transition the quickest, need to do so now while also supporting the transition to clean energy in developing countries. Current support from developed to developing countries is far from sufficient. The continent of Africa, for example, needs approximately US$ 277 billion per year to achieve its plans for lowering emissions, but current financial support is approximately $247 billion short of the target. This is despite the fact that it has 60% of the world’s best-suited areas for solar power – currently left largely unused. Without increasing financial support, and without changing their own fossil fuel consumption first, it is both hypocritical and unfair for developed countries to demand an immediate phase-out for all. Ideally, the world cannot keep on extracting fossil fuels if it wants to reach the emissions targets agreed upon during conferences such as COP28, but the transition to renewables should not incur yet another burden on developing countries either.


The views and opinions expressed in this article belong solely to the writer and do not necessarily reflect the views and opinions of the Warwick Economics Summit.

 

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