Cop28 must overhaul global financial system to address climate crisis, Eamon Ryan says

In spite of meeting amid geopolitical turbulence, delegates attending Cop28 have to secure agreement on changing the financial architecture of the world because it is undermining the ability to respond to the climate crisis, according to Minister for Climate Eamon Ryan.

The United Nations gathering of almost 200 countries, opening in Dubai on Thursday, must also take critical steps to apply the “polluter pays” principle to fossil fuel companies, even if this is initially on a voluntary basis, Ryan said in an interview with The Irish Times.

“It makes sense to use this Cop as a moment to get political agreement on changing the financial architecture of the world. It’s that big an ambition we need to aim for because it’s not serving our purposes at the moment,” he said.

“It’s not addressing climate change. It’s not signalling where the capital needs to go. It’s not rewarding those who want to invest in the more riskier areas particularly.”

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[ ‘Very worrying’ that UAE could use Cop28 host role to strike oil deals – Mary Robinson ]

Cop28 is the latest round of global talks on how to lessen the impacts of climate change. World leaders including King Charles III will be in attendance. Pope Francis has cancelled his trip to Dubai on doctors’ orders even though he is recovering from lung inflammation, the Vatican said.

The hope is the gathering will yield solutions that help to limit the long-term global temperature rise to 1.5 degrees, which the UN’s climate science body says is crucial to avoid the worst impacts of climate change. But that will require drastic cuts in greenhouse gas emissions, it says – a 43 per cent reduction by 2030 from 2019 levels.

Concerns have been raised in advance of Cop28 about the United Arab Emirates potentially using its position as host as an opportunity to strike oil and gas deals with some countries. Former Irish president Mary Robinson earlier this week said reports about this were “very worrying and inappropriate”. A Cop28 spokesperson described reports as inaccurate but did not specify what the inaccuracies were.

Ahead of the gathering, the Government has published “a concept note” – which Ryan drew up to advance Ireland’s position at Cop28 and was “shared first with our European colleagues and our other negotiators”. Some elements are incorporated in EU priorities.

“We changed the council conclusions at the European Council in our negotiating position to include redirecting finance from the fossil fuel industry to the clean [energy sector]. My job in Cop is trying to push some of those initiatives. And one of the ways we’re going to do it is, you could start even on a voluntary basis,” the Minister explained.

“Radical reform of the global financial system will be needed if we are to provide the necessary climate finance for mitigation, adaptation, capacity building and loss and damage,” the note concludes.

Ryan acknowledged current realities: “I mean, it’d be very hard to get the US House of Congress to agree on whether it’s Thursday or Friday, let alone how you how you would switch investments away from fossil fuels.

“But what we can do is start working with fossil fuel companies and countries and say, ‘if you provide the clean energy finance for projects, what we can do in an organised, UN approved modular system way of doing it is reduce the currency risk, reduce the regulatory risk, provide really transparent accounting and reporting rules, make sure there’s the skills in financing, in grid, in manufacturing, in the developing countries so that investment makes sense, makes a return’.”

[ Cop28 beckons: A hellish future is predicted, yet the world continues to take baby steps on climate crisis ]

That would be a win all-round, he added. “That’s good for Africa and development, and it’s good for climate and it gives business a better alternative way of investing.”

It requires saying to “close neighbours who we get on very well with” – US, Canada, UK and Norway – but who are expanding fossil fuel production and issuing new oil and gas licences, “this has to stop”, Ryan said.

“All it takes is a simple understanding of the science to tell you we have enough discovered proven resources of oil and gas to cook the planet forever and a day. We need to stop exploring and developing new fossil fuels. We need to make the switch.”

Ryan said the mood music was already in a good place as details on structuring a “loss and damage” fund for climate vulnerable countries was nailed down in advance.

“It’s likely to be agreed at an early stage… Otherwise, it would have poisoned the environment. We’re going to need countries to pledge funding for it. It needs real cash now.”

He added: “We have to deliver loss and damage but we need so much more because of the urgency and evident arrival of dramatic climate change this year and the need to accelerate [actions].”

A “global stocktake” required under the Paris Agreement showing the world is not on track to meet its climate change targets “requires a very broad response”.

He looked forward to pushing that as part of the European negotiation team. “One of the key issues is going to be around climate finance and the provision of funding, not just for loss and damage, but we need to double adaptation funding and we need to triple funding on mitigation; where we’re reducing emissions.”

This was against a backdrop of world hunger levels being back to where they were in 2005. Some 15 per cent of countries are currently in debt default and 45 per cent are at risk of becoming so.

Ireland, through the EU, is seeking five key elements in the Cop28 decision, including tripling renewable power, doubling energy efficiency and cutting out wasteful release of fossil methane. Ryan will be most focused on the need for investment in clean energy in developing and emerging countries and how that will be financed.

Fossil fuel industries have to pay some of the way, the Minister said. “They can’t just keep going, business as usual, expanding fossil fuel production, making the maximum profits they can out of the remaining years of the industry and not investing in clean energy.”

He highlighted data showing only 1 per cent of the fossil fuel industry’s supernormal profits is going into clean energy. “Only about 1 per cent of the clean energy investment that we made in the world is coming from fossil fuel industries, and that’s largely to Europe, America, China.”

He pointed to the injustice of “the shocking reality that there’s more solar panels in Holland, which is half the size of Ireland than there is in the entirety of Africa, which receives 60 per cent of the global solar radiation.”

That had to stop not just for climate reasons. “If we invest in Africa – one example of a continent with a lot of poor countries – that supports countries most impacted by climate change [that] have least responsibility for it. That invests in countries where we’ve got the most conflict… and also, that is a way of managing the forced migration, which is one of the biggest challenges we have in Europe and in other continents.”

He went on: “It won’t work if we just build a wall around Europe and kind of ignore what’s happening in Africa.

“One of the other benefits is: we can tap into solar from North Africa, the Middle East and so on that help provide energy security for Europe. That can be a kind of ‘a beneficial’ on both sides of the Mediterranean.”

On the risk that language on fossil fuels will be diluted, as has happened previously, he said: “We won’t know for a couple of weeks… It’s a hard process because it starts with the leaders – the prime ministers. That’s kind of strange. They need to give a signal on the first day, on the second day.”

[ Emissions gap leads to calls for scaled-up ambition at Cop28 and phasing out of fossil fuels ]

The declaration from the African Climate Summit in Nairobi, Kenya, was important because it was framing this as a development and climate issue, he said. “The way the Kenyan president put it, it wasn’t looking back saying ‘you’re the problem. You’re the cause of it all’ – it was looking forward in terms of ‘can we make the switch on it?’”

The opportunity can emerge, he believed, from identifying “what’s the thing that will unlock it?” UN secretary general António Guterres posed a similar question at Cop27, he recalled.

“What we need to do is break this, get away from a North versus South or an East versus West perspective here. We need to collaborate on climate, and if it’s a developed world versus developing, or it’s rich versus poor, East versus West, that won’t work,” Ryan said.

In the recent Paris Peace Forum, France and Kenya set out “a path where we could make this leap together, recognising it would take kind of two years to develop the climate finance models to deliver it. But that’s an example of co-operation we can row in behind.”

Similarly, Chinese and American leaders had put enmity aside when it came to the climate issue and said they wanted to co-operate.

Despite many previous disappointments at Cop meetings and them being “a slow and laborious and convoluted and difficult negotiation process”, he said consensus was possible. “I was in Abu Dhabi for the pre-Cop negotiations. I thought what was happening in Gaza would poison the ability to have any discourse. But there was a real mood for consensus, for trying to keep making progress.”

Ireland is very small but has a good global “voice” beyond the EU and close American, Australian, New Zealand and UK colleagues. That extended to very good relations with small island states and with lesser developed countries.

[ Zambia seeks green revolution but unstable climate threatens income of millions of small farmers ]

“When we say, ‘we need to prioritise investment in Africa, that’s coming from a tradition where that isn’t just talk in Ireland’s case… we have the potential to make the case for such an investment switch,” he said.

“We don’t have any fossil fuel companies. We have one gas field. We don’t have a vested interest in the fossil fuel economy. We have a vested interest in the switch to renewables and in a collaborative approach. That gives us a good place to make comment.”