Can expanded Brics pressure rich nations to fulfil ‘broken’ promises of US$100 billion a year in climate funding?

Emerging nations say only a fraction of the climate change financing promised by rich nations at a 2009 summit in Copenhagen has flowed to them
But analysts warn that Brics members must ‘see the opportunity’ to realise potential gains – and not be clandestinely undermined by the US

Brics

Biman Mukherji

Published: 11:30am, 29 Aug 2023

Why you can trust SCMP

Emerging economies will benefit from the Brics grouping’s recent expansion, analysts say, as it strengthens their ability to pressure rich countries to deliver on long-broken pledges of providing billions of US dollars annually to address climate change.

South African President Cyril Ramaphosa, the current Brics chair, announced last week that Argentina, Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates would become full members of the bloc from January next year.

Brazil, Russia, India and China were the first members, with South Africa joining soon after. Emerging nations say only a fraction of the US$100 billion a year in climate change financing promised by rich nations at a 2009 summit in Copenhagen has flowed to them.

A signboard displaying the temperature of 34 degrees Celsius in Sao Paulo on Wednesday last week. Brazil is experiencing a heatwave in the middle of its winter. Photo: AFP

Oxfam International said in a June report that rich nations were three years overdue on their climate financing promise. While donors claim to have mobilised US$83.3 billion this year, the charity said that the real value of their spending was at most US$24.5 billion because this included projects where the climate objectives had been overstated or funds were given in the form of loans and not grants.

“In terms of the broken US$100 billion-a-year climate change mitigation promise, the simple truth is the Global South has previously lacked leverage,” said Einar Tangen, a senior fellow at the Taihe Institute think tank in Beijing.

“Separated like grains of sand, they have been no match for the developed powers.”

The Global South, a grouping of developing and least developed countries, is generally seen to encompass Brazil, India, Indonesia and China, alongside other low- and middle-income non-Western nations.

How expanding China-led economic bloc Brics adds to the yuan’s global clout

Over the years, Brics nations have been united by their desire for a multipolar world, less dominated by the West. The bloc’s share of the global economy now rivals that of the G7 club of wealthy nations, but one of the biggest hurdles for Brics member states has been their disparate ideologies.

“Brics-plus is the first stirring of a consensus,” Tangen said, referring to the bloc’s recent expansion. “This, together with an increasingly interested Global South and Central Asian countries, represent the majority of the world’s natural resources, population, markets, GDP, growth, wealth and manufacturing, which puts them in a strong negotiating position.”

Brics, for example, now accounts for some 42 per cent of the world’s oil shipments, Tangen said.

A Russian crude oil tanker ship berthed at Karachi Port in Pakistan earlier this year. The Brics grouping accounts for 42 per cent of all the world’s oil shipments, according to analyst Einar Tangen. Photo: EPA-EFE

But he cautioned that the group could realise potential gains “only if they see the opportunity” and were not clandestinely undermined by the United States.

Several low- and middle-income countries have borne the brunt of climate change with a series of interlocking global crises, including the Covid-19 pandemic, which have hampered their ability to invest, experts say.

An independent high-level group of experts under the United Nations’ COP27 conference on climate change estimated last year that emerging markets and developing countries other than China would need to spend around US$1 trillion in total per year by 2025, and around US$2.4 trillion per year by 2030 to tackle the climate crisis.

Several world leaders, including those from small island nations and developing countries, have been calling for a complete overhaul of the international financial system to achieve this.

United Nations General Secretary Antonio Guterres at the Brics summit in South Africa last week. He has backed calls for rich countries to do more to tackle climate change Photo: AP

United Nations Secretary General Antonio Guterres has backed the calls. Last week, he urged developed countries to provide the promised climate financing of US$100 billion a year to developing nations, while underscoring that higher costs of living had exacerbated poverty, hunger and inequality, making it harder to reach sustainable development goals by 2030.

According to the UN, current government policies globally will lead to an average temperature rise of 2.8 degrees Celsius (5 degrees Fahrenheit) above pre-industrial levels, underlining the need for tougher targets and plans from major polluters at the UN’s COP28 climate summit in Dubai later this year.

Saudi Arabia, UAE taking ‘a step away’ from US with Brics membership: analysts

“The US$100 billion per year in funding – as was committed years ago at the Copenhagen COP – is insignificant compared to the US$3 to US$4 trillion per annum that will be required for energy transition to net zero,” said Dhruba Purkayastha, India director of the Climate Policy Initiative, an analysis and advisory organisation.

“But if it happens, and work is under way for the same, it will be an important signal of commitment from the Global North to the Global South,” he said.

Climate activists say they hope that emerging nations will be able to take a strong position on limiting global warming to safe levels and accelerate the transition to cleaner, zero carbon fuels at a G20 ministerial meeting in India next month.