Exclusives

Grim implications for developing countries as U.S. withdraws from Paris Agreement

by ISAAC ANYOGU

June 1, 2017 | 9:17 pm
  |     |     |   Start Conversation

Donald Trump, president of United States, which is the world’s second biggest carbon emitter after China has pulled the country out of the Paris Agreement. As a result of this action, the United States will halt contribution of $100 billion to the Green Climate Fund set up to persuade developing countries including Nigeria cut their own emissions and reverse climatic change impacts.

“In order to fulfil my solemn duty to protect America and its citizens, the United States will withdraw from the Paris climate accord, but begin negotiations to re-enter either the Paris accord or an entirely new transaction on terms that are fair to the United States, its businesses, its workers, its people, its taxpayers,” Trump said.

“So we’re getting out, but we will start to negotiate and we will see if we can make a deal that’s fair. And if we can that’s great, and if we can’t that’s fine.”

The United States has been contributing about $2.7 billion per year in climate finance to help efforts at cutting back on emissions of greenhouse gases. Some of these funds have been applied as loans, many below market interest rates to fund efforts in developing countries especially in the areas of renewable energy.

In 2015, the US contributed $53 million to the Least Developed Countries Fund, a contribution which helped some poor countries ramp investments in renewable energy and also gained the country significant goodwill from developing countries.

According to the Brookings Institute, a US-based non-profit public policy organization, some of the funds went through agencies like the U.S. Agency for International Development and the Department of Energy, while others were provided to the World Bank or through specialized United Nations funds and facilities.

Some support adaptation ($207 million per year), but most goes toward clean energy ($608 million per year) and “sustainable landscapes” ($208 million per year). Most of that last category goes to funding for protecting rainforests (and thus biodiversity) in the tropics.

These contributions also benefit the United States besides earning the country goodwill abroad. They create many American jobs as four-fifths of American contributions are made through their own agencies like USAID and the Export-Import Bank and American companies execute some of the projects abroad, creating jobs at home. Clean energy is now fastest growing sector of the US economy.

“If we stop or sharply reduce our funding to the world’s most vulnerable and poor nations as they struggle to cope with rising intensity of heat waves, sea level rise, strengthened hurricanes, and crop-withering droughts, we will be party to a preventable humanitarian crisis,” says the Brookings Institute.

Akachukwu Okafor, of the Initiative for Policy Research and Analysis (InPRA) told BusinessDay that this withdrawal means that “the chances of developing countries having finance to implement climate projects are further diminished. Nigeria is not likely to be affected by this as much as other developing countries. This is because Nigeria has failed (is yet) to activate access to GCF for over 3 years that countries such as Mali, Kenya, Senegal starting accessing GCF funds.

“While it will be difficult for developing to access climate finance from funds that United States contribute to, what will happen is that United States clean energy – renewable energy companies will be forced to look outside the United States where they will invest since the cancellation of Obama Climate Action Plan and Clean Energy Plan by Trump doesn’t favour RE companies.

“Nigeria and other African countries stand to be the highest beneficiaries of these potential investments. These means increased clean energy projects around the continent, increase in RE technical skills, increase in job opportunities and increase in socioeconomic development,” said Okafor.

Africa accounts for an insignificant amount of emissions but suffers the most from the impact of climate change. Therefore the Paris Agreement’s adaptation financing plan is a way to mitigate the impact but a withdrawal from the agreement by the United States may trigger other nations to renege on their commitments.

The Paris Agreement is a binding commitment by nearly 200 countries to limit global temperature to a 2C (3.6F) increase on the pre-industrial era, the first time a global, actionable consensus was reached. The United States said it would reduce its emissions by between 26 and 28 percent by 2025, contribute to a climate change fund and bump up renewable energy by 30 percent.

However the Trump administration is not prepared to let reason get in the way of business. On March 28, the US president signed an executive order aimed at rolling back Obama-era climate policies saying they were cutting jobs.

The order began the process of overhauling Obama’s landmark rule to reduce carbon emissions from power plants. It also terminated a number of executive actions by Obama aimed at mitigating effects of climate change.

Federal agencies were tasked with removing restrictions to a goal of boosting fossil fuel production and achieving energy independence. Trump even appointed Scott Pruitt, a climate change sceptic, to head the US Environmental Protection Agency, a government institution set up to help save the environment.

If other countries followed suit, it would have grave implications for coastal cities facing sea-level rise, parts of the world already affected by heat waves and food insecurity, and the planet’s endangered species.

Other nations who are not in the Paris Agreement are Nicaragua and Syria.

 

ISAAC ANYOGU

Tags: , , ,

by ISAAC ANYOGU

June 1, 2017 | 9:17 pm
  |     |     |   Start Conversation

Big Read |  

Analysis

What Nigeria must do before signing AfCFTA

Nigeria’s President Muhammadu Buhari last Wednesday gave a hint that he would sign the African Continental Free Trade Area (AfCFTA)...


Top 100 (300 x250)

MTN banner 2

WSE

Newsletter Fixed income