Putting the climate crisis into perspective: As we near COP27 in November — seven years after the Paris Climate Agreement was signed — many of the fundamental issues are yet to be ironed out. The dust hasn’t settled on everything from who bears responsibility — to who foots the bill for financing and to the debate about mitigation (slowing climate change) vs adaptation (figuring out how our cities, countries and businesses will live with it).
Perhaps there is no one better to help us get a sense of all of this than Egypt’s UN high-level climate champion, Mahmoud Mohieldin, whose work on these issues predates the Paris agreement — and who will continue to drive the agenda for global climate action in the period spanning COP27 (Egypt) and COP28 (UAE). Prior to his selection as Egypt’s climate czar, Mohieldin has had a distinguished history of public service in Egypt and at the IMF. Critically, he was the World Bank’s senior vice president for the 2030 Development Agenda, where he helped shape the 17 sustainable development goals — the global metric for development.
In part one of our sit-down, Mohieldin explains the fundamental challenges when it comes to the climate crisis, and provides a sobering reality check on just how far off the mark we are.
- Emerging economies bear no real responsibility for climate change, but are the most impacted by it;
- Developed economies are falling far short of the USD 100 bn per year they’ve collectively pledged to help emerging economies like ours here in MENA mitigate and adapt. The real gap, he says is in the USD tns, not USD bns;
- Reducing the climate change debate to “mitigation” suits the interests of developed economies;
- Mohieldin took the job as UN high-level climate champion because it meshes two of his passions: Crisis management and sustainable development.
ENTERPRISE: Let’s go back to the beginning. How did you wind up in this role?
MAHMOUD MOHIELDIN: This goes back to a process that started in Marrakesh a year after the Paris Agreement. Marrakesh is where the international community really recognized the importance of non-state actors — any entity or agency that is not part of the formal negotiation track. That includes the business community, civil society organizations, academic institutions, local and regional governing bodies, et cetera. So it’s a very broad tent of participants.
Within that, my focus is very much on the implementation side, on turning into reality everything the state actors agree on. I’m the seventh to hold this post, and there are two champions at a time. So I’m doing this work with the champion from COP26, Mr. Nigel Topping, and next year I should be doing this job with the climate champion selected by the UAE.
ENTERPRISE: Why was it the right challenge for you? Why was it appealing to you personally?
MM: Because it’s about a crisis and about development. It’s as simple as that.
I’ve been tackling crises and challenges throughout my professional life. Some of an economic nature, with challenges of development — challenges that were financial, economic and social — and now, climate.
And climate is the ultimate crisis. We do come across occasional short-term or midterm-crises — a financial crisis, a debt crisis, or even a pandemic — but the climate crisis is long-term and it affects everyone on the planet. It is very deeply rooted in history, going back to the Industrial Revolution. And the stakes are so very high.
It also relates to my years at the World Bank, where I worked on the 17 sustainable development goals (SDGs). My focus has always been on implementation, on finance, on monitoring data systems and helping the work at the country level and globally. When I was offered the chance to do this work, I thought, “This is a great chance to get into this area that had its own dynamics, but was very much integrated in the sustainable development framework that I had been working on.”
And it has many links with other problems. So while climate change is causing more poverty, more vulnerability, loss of economic potential, and negatively impacting social development … the solutions to the climate agenda are about investment, an area in which I have been working for many years.
Solutions to climate challenges are not just about massive investment in mitigation, in renewable energy, in tackling the impact of the crisis through adaptation. It requires more investment in human capital and resilience at large. Others take a much more narrow or “reductionist” approach to climate challenges.
ENTERPRISE: What do you mean by reductionist?
MM: Sustainability means handling different aspects of economic and social problems, including the political economy dynamics. This is the beauty of the structure of SDGs. You need to end poverty and you need to improve equity or equality in society. That will only happen through investment in health, education, infrastructure, digital infrastructure and resilience (including climate and biodiversity). If you take it this way, it’s about an inclusive and balanced approach to the challenges facing people and our planet.
A reductionist approach is telling you something completely different. It comes from a group of countries that have already benefited from their social and economic development. They have higher education levels, they have satisfactory health services, their economic progress and development brought them high living standards. These countries have hit the critical minimum of economic, social and human development. So, what’s left for them but the climate crisis?
That reductionist approach boils the whole discussion about sustainability down to mean decarbonization and emissions and taking as well measures like carbon pricing as a guiding star for their activities. This fits nicely with their own priorities for economic development going forward.
ENTERPRISE: Who are these countries?
MM: Let’s just say the very advanced members of the OECD — the club of rich countries.
ENTERPRISE: So what’s a holistic approach, then?
MM: Let’s start with Africa, Latin America or parts of East Asia. They haven’t really contributed to the mess we’re in, but they’re most exposed to the shocks. All of Africa is responsible for maybe 3-4% of global emissions, but water management systems are being compromised. Climate change has a severe impact on coastal areas. They’re exposed to severe weather. So when we talk about climate in developing economies, we need to do it in a comprehensive program. It needs to address a ‘typical’ African country that may already suffer more from poverty, inequality, from the quality of education, and from inadequate health services and infrastructure.
ENTERPRISE: This is the mitigation vs. adaptation debate that’s now taking place…
MM: Mitigation is very important. It’s a problem developing nations share with advanced economies. But in many developing countries, adaptation is at least as important as mitigation. It’s about how we handle the negative impact and spillover from climate change. It means, simply, getting all of the dimensions related to the Paris Agreement, not just focusing on climate.
It also means how do we line up finance: How do we invest to address the climate crisis and development rather than borrowing more.
ENTERPRISE: Let’s talk about finance, then. How do we pay for it?
MM: We’re not doing enough. Too many developed economies are falling short. Let me take it from the beginning. Back in ‘09 in Copenhagen, the idea was basically that advanced economies could pay their own climate bills, but it would be a challenge for developing economies to do the same.
Emerging economies are short on resources — and they’re genuinely not responsible for the mess on climate. So, practically and morally, there is a need for funding to flow to them.
That’s where this USD 100 bn figure comes in — the idea that developed countries would together come up with USD 100 bn per year by 2020 (since extended to 2025) to help emerging economies take action on climate. COP veterans know that that nice round figure was a critical minimum. It was meant, initially, to be public finance (in the form of grants) and very concessional funds.
It has never been paid in full. The closest we got to that USD 100 bn figure was last year, when a committee said that advanced economies managed to contribute 79% of the bill. And this figure is challenged by many think tanks and research centers with suggestions that there has been double and multiple counting.
ENTERPRISE: What’s the real figure, then?
MM: There have been suggestions that it is closer to 20%, not 80%. I am arguing that the gaps are in the tns of USD. Having an argument over the USD 100 bn figure as if it solves the whole thing is a mistake. It diverts attention. Don’t get me wrong: There are many people who take that figure seriously. And without that figure, many of the development finance and climate entities cannot do their work. Many low-income countries are very much dependent on that figure.
This USD 100 bn figure is a token of trust — it’s a small figure by any measure. If you cannot deliver on that, how can I trust that you’ll address the bigger figure that is required — the tns of USD for energy transformation and adaptation? It’s also important to remember that these USD can be leveraged. That USD 1 can create USD 2, 3, 4, 5 more, depending on the funding model.
I hope we will all benefit from the experience post-2009 and that the result will be that we have a more realistic figure for the post-2025 world — and that we’ll have a mechanism to encourage participation. We will also need to have some sort of monitoring process in place. At the end of the day, these funds are coming from rich economies of their own will.
ENTERPRISE: Who’s not paying their bills?
MM: I’m not in the business of naming and shaming. So I’ll say this: There are some countries, including the Scandanavians and other Europeans, who are paying their bills nicely. Take the Overseas Development Institute’s report: Sweden, France, Norway, Japan, the Netherlands, Germany and Denmark are all doing well in terms of progressing toward providing their fair share. The others? They’re at less than 20%. Some of the richest countries are close to 5%.
I want to stress that whatever the new number is for 2025 onward, we need to agree on it soon. And it needs to draw on the lessons we’ve learned so far — we need to also think about development finance gaps. Widening it to talk about development doesn’t mean losing focus or diluting responsibility — it acknowledges the reality on the ground in emerging economies.
ENTERPRISE: Is that where this “stocktaking” that you’ve been talking about comes into play?
MM: The presidencies of COP27 and COP26 have commissioned an independent committee led by Vera Songwe and Nicholas Stern that is working hard to finish a stocktaking exercise that will deliver a blueprint on how to get our act together on climate and development finance.
THE SECOND AND FINAL PART OF OUR INTERVIEW WITH DR. MAHMOUD runs tomorrow in Enterprise Climate, looking at financing mechanisms, whether Egyptian CEOs are doing enough when it comes to climate, and what a first-time attendee at COP27 can expect.