Md Zahurul Al Mamun:

THE fossil fuel industry’s enormous wealth and influence extend beyond shaping global politics and economies; it casts a long shadow over the arena of climate talks. The industry has infiltrated the climate talks arena, using its power to undermine global efforts to address the climate crisis. The alarming rise of fossil fuel lobby groups at recent Conferences of the Parties, COPs, and their push for false solutions that benefit their profits need to be revealed. We also need to examine the potential conflict of interest of big consultancy firms advising governments and fossil fuel companies on climate policies. We denounce the hypocrisy of developed countries that deny their historical responsibility for emissions and refuse to pay their fair share of climate finance. We also need to uncover the abuse of carbon credits and offsets that allow polluters to continue business as usual while claiming to be green. As the United Arab Emirates gears up to host the 28th session of the Conference of the Parties to the UNFCCC from November 30 to December 12, 2023, questions loom large: Can Dubai represent the interests of the most vulnerable countries, ensure the transparency and accountability of the climate finance, bridge the gap between the polluters and the victims, the leaders and the laggards in the fight against climate change?

A disturbing dominance

Historical context: The fossil fuel industry, having historically moulded political and economic landscapes, shapes policies and agendas for its own interests and profits. In recent years, the fossil fuel industry has intensified its influence on the climate talks arena, where the fate of the planet and its people is being negotiated, with fossil fuel lobby groups dominating climate discussion and outnumbering the participants from the least developed countries, small island nations, and other minor groups, creating an asymmetry in participation and representation. The industry’s influence was evident in the final text in COP27, which lacked a strong commitment to phase down coal and fossil fuels, setting the stage for continued debates, with the battle expected to resume at COP28.

The fossil fuel industry was present and powerful at COP27, with more than 636 delegates and lobbyists registered, representing 25 per cent more than the previous meeting. The conference also faced significant obstacles and opposition from the fossil fuel industry, which has a vested interest in maintaining the status quo and delaying the transition to a low-carbon economy. These delegates were mainly pushing for gas, the least dirty fossil fuel, as a ‘bridge fuel’ to be used while countries transition towards renewables. They also influenced the negotiations and decisions on key issues such as emissions reduction targets, fossil fuel phase-out, and climate finance. The fossil fuel industry accounts for about 80 per cent of global primary energy supply and 75 per cent of global CO2 emissions.

Moreover, Dubai’s COP28 hosting has sparked global controversy due to the appointment of its state-owned oil company CEO Sultan Al Jaber as president, raising doubts about his ability to lead climate negotiations effectively. This conflict of interest is seen as a threat to the credibility and integrity of the negotiations and actions.

Wealth and influence: The fossil fuel industry’s reception of billions and trillions from major banks fuels its disproportionate power dynamics, tipping the scales in the climate negotiations. This financial backing gives fossil fuel lobby groups a commanding presence, often drowning out the voices of those most affected by climate change. The lobby groups use their wealth and influence to shape the climate talks’ agenda and outcomes. They also pressure governments and institutions to protect their interests and weaken the regulations and standards limiting their emissions and operations.

One of the primary sources of the fossil fuel industry’s influence is its immense wealth, which is derived mainly from the financial backing of major banks. According to a report by Rainforest Action Network, between 2016 and 2020, the world’s largest 60 commercial and investment banks provided more than $4.6 trillion to the fossil fuel sector, with the top 12 banks accounting for 68 per cent of the financing. In 2021 alone, they have provided an enormous sum of $742 billion. This staggering amount of money fuels climate change by enabling greenhouse gas emissions and global warming from coal, oil, and gas production and consumption. These banks enable the expansion of fossil fuel projects worldwide and have a stake in their profitability and longevity.

Fossil fuel lobby groups use various methods to advance their agendas and obstruct climate action. Specific examples include the American Petroleum Institute, the largest trade association of the US oil and gas industry, which has a long history of lobbying against climate policies and regulations. The World Coal Association represents over 50 major coal producers, businesses and national associations, advocating for coal’s role in the global energy mix, particularly in developing countries. The World Coal Association engages with the UNFCCC and COPs to influence climate negotiations and defend the coal industry’s interests. The International Emissions Trading Association advocates for expanding and integrating carbon markets and trading as the main mechanism to reduce greenhouse gas emissions and achieve the Paris Agreement goals. It also lobbies for including and recognising various carbon offsetting schemes, such as REDD+.

The devil’s advocate

CONSULTANCY firms, particularly industry giants like McKinsey, play a pivotal role in shaping the discourse around climate action, offering a suite of services to the fossil fuel industry encompassing strategy, management, operations and finance. Notably, a comprehensive report by InfluenceMap sheds light on McKinsey’s financial landscape, revealing that the firm amassed over $1.3 billion from engagements with the fossil fuel sector during the period spanning 2015 to 2019. At the same time, they also partner with the UN and other international institutions to support climate action, providing research, analysis and recommendations on various aspects of climate policy and negotiations. According to the UN Global Compact, McKinsey is one of the leading consultancy firms in the UN’s network of responsible businesses.

This dual engagement creates a troubling dimension to the climate talks, as it introduces potential conflicts of interest as the consultancy firm may be incentivised to favour the interests and perspectives of their fossil fuel clients over those of the UN and the global community. For example, McKinsey has advised oil and gas companies from America’s ExxonMobil to Saudi Arabia’s state-run Aramco, on expanding production and exploration while also advising the UN on how to achieve the 1.5°C goal of the Paris Agreement. This intricate involvement gives rise to apprehensions about biased influence permeating global climate policies, potentially diverting attention from the best available scientific insights and urgent needs.

McKinsey’s energy scenarios for the COP28 presidency suggest that oil and gas demand will only decline by 50 per cent by 2050, necessitating $2.7 trillion per year of new investment in these sectors. This is incompatible with the Paris Agreement’s goal of limiting global warming to 1.5°C, which requires a rapid and deep decarbonisation of the energy system. The International Energy Agency has warned that no new investment in fossil fuels is compatible with this goal.

Adding to the complexity, McKinsey’s advocacy for natural gas as a transitional fuel and the deployment of carbon capture and storage technologies has sparked controversy. Critics argue that these solutions may prolong dependence on fossil fuels and divert resources away from renewable energy initiatives. This dual role further introduces concerns about transparency, as consultancy firms may not fully disclose their affiliations and may operate with minimal oversight or scrutiny by the UN and the public.

McKinsey is best understood as possibly the most powerful oil and gas consulting firm on the planet posturing as a sustainability firm, advising polluting clients on any opportunity to preserve the status quo, earning huge profits from their services and contracts. They also benefit from the power and influence of the fossil fuel industry, aligning themselves with its interests and perspectives. Additionally, they profit from the lack of regulation and standardisation of the consultancy sector, operating with minimal disclosure and accountability.

Developed countries’ evasion of responsibility

Historical emission denial: The climate talks face a significant challenge in addressing historical emission responsibility, which refers to the cumulative contribution of different countries to global greenhouse gas emissions since the Industrial Revolution. According to a report by Carbon Brief, the top 10 historical emitters account for 72 per cent of the global emissions between 1751 and 2019, with the US, the EU, and China being the top three. However, despite their historical contributions to emissions, developed countries often downplay or outright deny their responsibility for the climate crisis, arguing that they should not be held accountable for their past emissions due to their economic development and industrialisation.

They argue that developed countries have already taken significant actions to reduce their current and future emissions and provided financial and technological support to developing countries to cope with the impacts of climate change. They also point out that developing countries, particularly China and India, have higher emissions than theirs and should bear more responsibility and take more actions to address the climate crisis. This denial of historical emission responsibility impedes the principle of common but differentiated responsibilities and respective capabilities, enshrined in the UN Framework Convention on Climate Change and the Paris Agreement.

This principle recognises that countries have different levels of responsibility and capacity to deal with the climate crisis based on their historical and current emissions, economic and social development, and technological and financial resources. It also implies that developed countries should take the lead in reducing their emissions and providing adequate and predictable support to developing countries, while developing countries should enhance their actions following their national circumstances and capabilities. This principle is essential for ensuring the equity and justice of climate action and agenda.

However, developed countries often avoid or neglect their commitments and obligations under the UNFCCC and the Paris Agreement, using their economic and political power to influence the climate talks and outcomes. For example, developed countries have failed to meet their pledge of mobilising $100 billion annually by 2020 to support developing countries in mitigation and adaptation. They have also pushed for market-based mechanisms, such as carbon trading and offsetting, which may allow them to continue their emissions without making any real reductions. They have also pressured developing countries to increase their ambition and action while ignoring their historical responsibility.

Alleged climate fund misallocation: Developed countries often evade their responsibility for the climate crisis by allocating climate funds to projects that are not genuinely climate-related or beneficial. These funds are supposed to support developing countries in reducing emissions, adapting to climate change impacts, and transitioning to low-carbon development. However, some of these funds are used to finance projects that are either harmful to the environment and the people or irrelevant to the climate agenda. The Matarbari power plant in Bangladesh, financed by Japan, portrays this issue.

The project, a coal-fired power plant, is funded by the Japan International Cooperation Agency, which provides a loan of $3.7 billion to the Bangladesh government and is expected to produce 1,200 megawatts of electricity and emit 7.9 million tonnes of carbon dioxide annually. JICA claims that the project is part of its climate finance, as it uses ultra-supercritical technology that reduces the emission intensity of coal combustion. However, this claim is misleading and controversial, as the project will still increase Bangladesh’s overall emissions and contribute to global warming. Moreover, the project will negatively impact the local environment and the people’s livelihoods, such as the destruction of mangrove forests, the displacement of fishing communities, and water and air pollution.

The Matarbari power plant case highlights the misalignment between the purported climate commitments and the actual actions of developed countries, as well as the lack of transparency and accountability in allocating and reporting climate funds. According to a report by Carbon Brief, only 26 per cent of the climate finance reported by developed countries in 2022 was in the form of grants, while the rest was in the form of loans, guarantees or equity. Moreover, the report found that some of the projects counted as climate finance had little or no relevance to the climate, such as airport expansions, waste incinerators and fossil fuel infrastructure.

According to a recent 2023 study by Oxfam, wealthy nations are compromising efforts to protect vulnerable countries from climate crisis impacts by providing loans instead of grants, siphoning off funds from other aid projects, and mislabelling cash. The study also found that the World Bank’s climate finance reporting processes are insufficient, with claims of climate finance levels potentially being off by up to 40 per cent. Oxfam calls for increased transparency and accountability in climate finance reporting and support for adaptation and resilience in developing countries.

Carbon credit controversy: The purchase of carbon credits from Africa by developed countries has been controversial for several reasons. First, it does not necessarily lead to a net reduction of global emissions, as it may allow developed countries to continue or increase their fossil fuel consumption and production without changing their own economies and societies. This creates a paradox in climate mitigation strategies, as the developed countries appear environmentally conscious, but in reality, they are shifting the burden and cost of emission reduction to the developing countries. A report by the Guardian revealed that more than 90 per cent of the rainforest carbon offsets approved by the world’s leading certifier, Verra, were worthless and did not represent genuine carbon reductions.

Second, purchasing carbon credits from Africa may not reflect the actual impact of the projects or activities that generate them, such as deforestation, land grabbing, displacement, land degradation, biodiversity loss, human rights violations, corruption and social conflicts. Some of these projects may be overestimated, exaggerated or fraudulent, meaning they do not deliver the promised emission reductions or would have happened without the carbon credits. A recent investigation by the Guardian and SourceMaterial found that more than 90 per cent of the rainforest carbon offsets approved by Verra, the world’s leading carbon standard for the voluntary market, are likely to be ‘phantom credits’ and do not represent genuine carbon reductions. Another study by the Stockholm Environment Institute found that the Clean Development Mechanism, a carbon offsetting scheme under the Kyoto Protocol, had issued credits for projects with a low or no impact on emissions, resulting in an excess of 600 million tonnes of carbon dioxide in the atmosphere.

Third, purchasing carbon credits from Africa may not contribute to the continent’s sustainable development and climate justice. Africa is the most vulnerable region to the impacts of climate change. It also has the lowest per capita emissions and the least historical responsibility for the climate crisis. However, it receives the least support and recognition from the developed countries regarding climate finance, technology transfer and capacity building. By buying carbon credits from Africa, the developed countries may exploit the continent’s natural resources and cheap labour while avoiding their moral and legal obligations to help the continent cope with and adapt to the climate crisis.

One example of this exploitation is the case of the Kariba REDD+ project in Zimbabwe, which claims to protect 785,000 hectares of forest and wildlife from deforestation and degradation and to generate carbon credits for sale to international buyers. The project is supported by the World Bank’s Forest Carbon Partnership Facility and the BioCarbon Fund and has received funding from several developed countries, such as Germany, Norway, and the United States. The project is also certified by Verra, the world’s leading certifier of carbon offsets.

However, the project faces accusations of violating local rights, displacing communities from their ancestral lands, and lacking transparency. Moreover, the project’s effectiveness and additionality are questionable, as the forest area was already protected by the national parks authority before the project started.

Victims of climate scam

Adaptation finance and loss and damage: Developing countries face a critical need for adaptation finance and loss and damage support in climate talks. Adaptation finance enhances resilience, reduces vulnerability and increases adaptive capacity. Loss and damage support compensates for losses, repairs damages, and aids in population relocation. However, developed countries often neglect these urgent needs, focusing more on emission reduction (mitigation) than on addressing the consequences. They tend to provide insufficient, unpredictable and conditional funding for adaptation and loss and damage rather than adequate, predictable and unconditional funding as promised. They also tend to avoid or delay the recognition and implementation of the legal and institutional frameworks for adaptation and loss and damage, such as the Warsaw International Mechanism and the Santiago Network, further exacerbate the challenges. The repercussions of neglecting developing countries’ adaptation needs and loss and damage concerns are severe, impacting lives, livelihoods, cultures and human rights. Without timely support, these countries face increased challenges in achieving development goals, poverty eradication and heightened regional conflicts and instability.

Impact on vulnerable countries: The influence of the fossil fuel industry in climate negotiations poses a serious threat to achieving the 1.5°C goal and the Paris Agreement and to the survival and well-being of vulnerable countries and communities that are already facing the devastating impacts of climate change. Vulnerable countries like Bangladesh, already grappling with climate change impacts, could see 13 million people pushed into poverty by 2030. By 2050, 17 per cent of the country’s land may be submerged, displacing 18 million people, according to the World Bank. Bangladesh, with low per capita emissions and a minimal historical contribution to the global carbon budget, relies on international cooperation for adaptation. The success of climate negotiations is crucial for its pursuit of a low-carbon, sustainable development path.

The urgency for change

AS THE fossil fuel industry tightens its grip on climate talks, the urgent need for transparency, equity, and a re-evaluation of financial and environmental commitments cannot be ignored. Developed countries evade emission responsibilities, leaving developing nations to bear the brunt. Climate funds and carbon credits face misuse, and concerns about adaptation finance and loss and damage are consistently neglected. This situation contradicts the UNFCCC and Paris Agreement principles of shared responsibilities, equity, justice, and global solidarity.

Approaching COP28, we urge the global community to acknowledge the reality of this ongoing issue and collaborate for a more just and sustainable future. Increased transparency and accountability in climate policy and negotiations are imperative to resist the influence of the fossil fuel industry. Developed countries must fulfil their commitments by providing adequate and predictable funding and technology transfer and recognising adaptation, loss and damage issues. Despite having the science, technology and resources to combat the climate crisis, the willingness of developed countries remains a crucial missing element.

In summary, the climate crisis demands a global response, yet climate talks lack transparency and equity. Fossil fuel lobby groups wield their wealth and influence on moulding climate policy and negotiations to their advantage. This resembles a rampant scam, with developing countries being mere bystanders. It is time for the global community to expose and resist these lobby groups, demand increased transparency and accountability, and support the transition to renewable energy to safeguard climate goals and human rights principles. The future of our planet and people hinges on this transition. Will we succumb to the dictates of fossil fuel lobbyists, or will we champion our rights and secure a sustainable future for all? The choice is ours.

Md Zahurul Al Mamun is an independent climate researcher.