Inflation has caused a cost of living crisis in much of the world in recent years. Some fearmongers have used the plight of billions of people to argue that climate action is costly and against the interests of ordinary people. Nothing could be further from the truth.
The “green vs. poor” narrative is divisive and is often used to cover short-term interests and profits. At the same time, the only stable and economically sustainable future is energy security, resistance to disasters, well-financed coordinated recovery after them – and above all keeping global warming to 1.5 degrees Celsius.
Fossil fuels – coal, oil and gas – are the main cause of the cost of living crisis, which is straining the budgets of billions of households. Prices fluctuate wildly, which happens often. However, the current fluctuations are strongly fueled by uncertainty and conflict today. These lead to an increase in transport costs, food prices, electricity and other most basic household needs. In some countries that are heavily dependent on fossil fuels, annual household bills will increase by up to a thousand US dollars in 2022 due to energy costs alone.
According to economic authorities such as the US Treasury, the Reserve Bank of India or the European Central Bank, consumer costs will increase further and economic growth will slow as the effects of climate change become more intense. High energy prices are also driving down business profit margins, harming economic growth and limiting the right to access energy worldwide. Inflation affects the poorest households the most.
All this is happening at a time when climate disasters are intensifying in all countries. This year will probably be the warmest in the last 125 thousand years. More destructive storms, unpredictable rains and floods, heat waves and droughts are already causing huge economic losses. And they affect hundreds of millions of people worldwide.
Fossil fuels cannot be shut down overnight. But there are plenty of opportunities and scope for action that are not currently taking place. In 2022, for example, governments spent more than seven trillion dollars in taxpayer money or loans on fossil fuel subsidies. At the same time, the subsidy does not protect the real incomes of the poorest households. This is money that could otherwise be used to improve health care, build infrastructure – including renewables and grids – or social programs to alleviate poverty. A responsible and gradual phase-out of these subsidies would help the poorest and strengthen the economies of countries that now depend on them.
This year, at the UN Climate Change Secretariat, we produced an analysis of global climate action to date. It clearly shows that progress is too slow. But it also turned out that we have many tools at our disposal to speed up climate action, which will also lead to building stronger economies. We have the knowledge and tools to accelerate this transition while ensuring it is fair and leaves no one behind in the dust.
Billions of people need their governments to pick up this toolkit and start using it. This includes shifting billions of dollars from investment in new fossil fuel generation to renewable energy sources. RES will provide stable, reliable and cheaper energy, which will subsequently support economic growth. It’s about supply and demand. Those of us who require energy to light up need to be given clean options to do so. And also the fiscal space to invest in our communities and their ability to adapt to a changing world.
If government representatives arrive at this year’s UN climate conference in Dubai in a spirit of cooperation and focus on solutions, there is reason for optimism. At COP28, we can reach an agreement to triple the world’s renewable energy capacity. We can double energy efficiency. We can double funding to help countries adapt to the impacts of climate change. We can launch a climate change compensation fund to help ensure climate justice. And we can deliver on old promises about funding the transition and outline how we will fund the next steps.
One conference cannot change everything. But it can move us towards the realization of national commitments by 2025.
I refuse to let scaremongering cover my eyes. Let’s all reject it.