COP 30: Stop Pitting Climate Goals Against Development

Introduction

Not to be alarmist, but 2 million Cameroonians are directly impacted by extreme climate events. Higher food prices, food insecurity, and spoilage are compounded by security risks in the North West and South West. COP 29 is the global jamboree to set goals and hopefully achieve them. This year, the outcomes were less than average – and that’s being nice. The U.S. was largely absent, and advanced countries illustrated once again that financial commitments will lag without the U.S.

Petro states refused any schedule to phase out fossil fuels, despite agreeing in broad terms to this at the previous COP. Their economies are the priority, and the well-being of their citizens cannot be sacrificed at the altar of a Cameroonian farmer’s crop yield. However, the failure of a more ambitious communique means there is a unique chance for markets to step in as the alternative to globally-driven reductions in carbon emissions.

What Must We Do in the Absence of a Global Consensus

1. Popularize and Improve Market Incentives for Climate Finance

In a country like Cameroon, less than 3% of climate finance is obtained locally. The majority of climate finance is obtained from multilateral and bilateral partners to support the attainment of the nationally determined contributions under the Paris Climate Agreement. However, the regulator (COBAC) is treating green loans on bank balance more favorably to ensure that banks can lend to long-term projects and still meet capital requirements.

We must concede that this can increase the risk of contagion, but it can free up ample capital for banks to finance climate adaptation projects with long lead times and lower returns. For banks, it is better to diversify their returns and insulate their balance sheets. After all, charity begins at home – despite this not falling in that category.

For Microfinance institutions that invest in climate projects, we must raise the cap for non-performing loans that can be deducted from taxes from 5 million to 10 million. This will enable them to invest in small-scale projects that are deemed high risk. For example, scaling biodegradable coal is something that MFIs can fund, support businesses, and create local jobs. Cameroon’s 18 commercial banks have about FCFA 7,000 billion on their balance sheets, which can be used to fund local projects with an immediate or medium-term dividend.

• We Should Not Pit Private-Sector Development Against Climate Action

The climate debate is, unfortunately, ideological for some. Let’s not forget that over 120,000 Cameroonians use electricity from decentralized solutions (notably solar panels). To those citizens who were excluded from the grid for decades, they don’t care about the climate debate or fossil fuels. They want electricity. While we continue to export unprocessed crude oil, we should use decentralized solutions to ensure that our brothers and sisters in rural areas. There is no reason why we should deprive citizens in rural areas from accessing electricity due to an obsession with fossil fuels.

“Citizens who are connected to the grid can use decentralized solar solutions while the fossil-fuel-powered economy continues to provide us with deodorants, watches, and shower gel packed in single-use plastics.“

We must categorically reject the view that development is not possible with renewable energy. Several companies in Cameroon already use solar due to irregular electricity supply. To them, the energy transition has nothing to do with climate action, but the need for clean, reliable, and accessible energy. We do ourselves a disservice when we latch onto fossil fuels, not solutions that can potentially provide 20% of our brothers and sisters who live in the dark.

• Maintain Environmentally Friendly Incentives 

We should maintain incentives in the budget that promote environmentally friendly agriculture and electricity. While this will favor imports of solar panels and wind turbines, innovation will eventually diffuse into the economy, causing parts and panels to be produced locally. Zero import duties will encourage decentralized solar solutions to power millions of homes and reduce carbon emissions in the process – even if this is not the explicit goal.

• Invest in Human Capital

There is and should be greater urgency in investing in human capital. After all, innovation will address electricity access and climate change all at once. Most of the solutions that can help with adaptation are technology-related. For example, Agrix Tech is already using AI to help farmers detect soil and plant health and adapt accordingly. We need more solutions that can create jobs, accelerate agricultural productivity, and improve resilience against extreme climate events.

• Better Grid Management

Over time, the adoption of decentralized solutions means that more energy will be generated from renewable sources. Better efforts should be made to integrate renewable energy into the grid to reduce outages and carbon emissions. Prioritizing this will ensure that Cameroon has the capacity to adopt renewable energy technologies sustainably – after all, the sun is hot. There is no reason why we shouldn’t use solar when we can.

What Happened at COP 29?

The 30th Conference of the Parties (COP30), the annual climate summit of all nations party to the UNFCCC, just ended. Stakeholders are out in the media trying to spin the outcome as a win. I won’t spend a single second trying to talk about missed finance and carbon emissions targets. I am more concerned about a dangerous narrative that is now echoed by our Dear von der Leyen’s

“The issue is the emissions, it’s not the fuel”. It has long been the position of the Saudis that the world could continue to use fossil fuels and simply remove the economy’s 600m metric tonnes of annual carbon dioxide emissions with carbon dioxide removal. But this is nothing more than fossil-fuel propaganda”. 

A cynic will tout this as nothing more than a testament to the fact that innovation will help transition us away from fossil fuels. So, they should invest in said technologies instead of creating futuristic societies in the desert.

More Financial Commitments?

At every COP, advanced economies promise funding to help developing countries meet their climate goals. After all, they didn’t cause climate change and are subject to the vagaries of climate change and environmental degradation. While it is true, it is counterproductive to lay blame. But it is equally important to view climate finance as a mutually beneficial imperative, not charity.

Climate finance is not charity, but an investment in the future. A more sustainable, fair, and mutually beneficial future for all countries. It is only fair that countries that polluted the planet incentivize less developed countries to choose a different path.

Advanced economies are highly indebted and are making cuts to their social safety nets to fund wars and hold back spending. This is not disconnected from their ability to invest in developing countries, which must reduce emissions and emit less, but the absence of the U.S. should not compromise climate goals.

Authors

Haiwang Djamo (National Coordinator).

Sonia Kouam (CEPI Board Member).