Political Economy Students' Journal

Introduction

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Climate change is one of humanity’s greatest challenges for the decades to come, and solving this problem requires that the global economy takes a more sustainable path. Deals such as the Paris Agreement have aimed at solving the problem through cooperative climate action that involves a similar course of action for countries at different stages of their development. I view this as a big issue, since the most industrialized economies (and, generally speaking, the world’s richest countries) are responsible for a disproportionate share of anthropogenic carbon emissions. On top of that, economic literature has found a connection between CO2 emissions and development. This means that applying the same standards to all countries, regardless of their “income status”, would not only be inequitable, but could also stunt their growth. Therefore, the argument I will make in this essay is that the effort to curb emissions must be proportional to each country’s current contribution to global warming, with richer countries carrying more of the burden and low-income nations being excluded from carbon-neutrality demands for the near future. For this, I will take the reader through the historical development of the West on the back of natural resources, before addressing the geopolitics of climate action, explaining the emissions-development nexus, and finish by presenting concrete policy guidelines.

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Approaches to the climate problem/disclaimer

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This essay, although it draws some inspiration from a Tadesse Teklu (2018) – an author who actively denies the gravity of climate change and the urgency of taking action – paper, does not go against the will to combat climate change and its necessity. On the contrary, I believe in the general scientific consensus on man-made global warming (Environmental Defense Fund, n.d.; Rafferty, 2016; Royal Society, 2014; WWF, n.d.), and share Tim Jackson’s (2009:200) concern with guaranteeing that all countries’ development is sustainable and remains within ecological limits. In other words, I do not deny that a transition is needed: I just believe that it can be done in a more just way than projected.
 

Primitive accumulation and energetic development

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One of the most famous contributions of famous German economist and sociologist Karl Marx (1867) is the concept of primitive accumulation. Contrary to Adam Smith’s (1776) depiction of capital accumulation as a peaceful process, by which those who worked harder were rewarded and managed to build up wealth, primitive accumulation is a process by which violence, war, enslavement and colonialism allowed some people, groups, and nations larger amounts of wealth than others.

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Orthodox Marxists see primitive accumulation as a historical process that ended in the transition from feudalism to capitalism. However, and more interestingly to our point, David Harvey (2003) redefines it as “accumulation by dispossession”, a process that is continuous on the world scale. This relies on the “cheaper labour-power, raw materials, low-cost land” (Harvey, 2003: 139) and other factors of production that are gathered through the continuous appropriation of unexplored resources.

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I argue that both primitive accumulation (in pre-capitalist times) and accumulation by dispossession (in more recent decades) have been a decisive factor in the economic and developmental supremacy of the Global North over the Global South. As Hickel et al. (2022) point out, the earlier stage (that of colonialism) financed the development and industrialization through the exploitation of natural resources such as gold, or spices. Meanwhile, the unequal exchange theory (ibid) puts forward that the neocolonialist economy keeps the relations of dependence and subordination of the South (and therefore, of LDCs) through price differentials in world trade. Hickel and his peers point out that the North drained around $242 trillion from the South between 1995 and 2010 thrugh modern appropriation.

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My argument is that both processes have harmed the energetic development of LDCs, while allowing the Global North to industrialize and develop using their own, and later to capitalize on a position of economic dominance for the exploitation LDCs’ energy resources - through trade or ownership of companies that invest in LDCs. For example, West African fossil fuels were exploited by the French during the colonial era (Hickel et al., 2022), and the oil and gas resources of the region are now mostly in the hands of Western companies (Maxted, 2006). Considering the consequences of this historical process, I believe that LDCs should now be allowed to exploit all of their energy resources, even the pollutant ones, more independently, in order to develop. The global North should take most of the responsibility due to its past and present of colonialist and neocolonialist exploitation that has led certain countries to be the richest ones, and also the biggest pollutants. Of course, more recent big polluters that are developing economies, such as China and India, should be included with this latter group.

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Geopolitical implications of climate agreements, such as the Paris agreement

 

Throughout history, and as demonstrated above, countries have strategically governed to secure access to energy resources such as oil and gas, often involving imperialism and domination. Energetic needs later contributed to shaping countries' international cooperation. Climate Action is one of the greatest challenges for 21st-century governance. The signing of the Paris Agreement, for instance, conceives a global framework regarding climate action that displays cooperation never seen before in previous climate agreements. It gives least developed, developing, and developed countries the same responsibility in projecting a sustainable economic future, such as to mitigate global warming consequences. This raises a new geopolitics concern since all countries are expected to commit to reducing their CO2 emissions. The geopolitical dynamic arising from the deals such as the Paris Agreement is a major concern for lower- income countries. Teklu (2018) argues that if LDCs don’t follow the big, developed economies, there is a risk of isolation and stoppage of economic aid from Western donors. From that point of view, the signing of these agreements might be an economic strategy for countries without oil and gas resources, to gain independence energy-wise and get new economic opportunities.

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Candidly, the signing of the Paris Agreement affects energy demands that are considered a risk for some and an irrefutable opportunity for others. The energy sector has evolved, and there are new market opportunities for investment in renewable energy and sustainable infrastructures that can help achieve the Paris hopes. In this context, the example of China’s “belt and road” initiative, considered to be a major strategy for the country’s foreign policy interests, gives the possibility for LDCs to boost their national economies and promote sustainable development, at the same time it promotes China to a leadership role in the world’s development (Bergamaschi & Sartori, 2018).

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Even so, from the failure of previous agreements that excluded LDCs from negotiations (such as the Kyoto Protocol or the Copenhagen Accord), it should be gathered that the only way forward would be for the Paris agreement to include all parties in this process (Touza, 2018). This should be done with a “hybrid” approach – a “bottom-up” dictation of national commitments (Nationally Determined Contributions – NDCs) that considers the national context and capabilities of each country, joined with a “top-down” rulemaking and oversight.

 

To some authors - such as Teklu (2018) – however, the Paris agreement and related policies, no matter how inclusive, are still part of a Western “greenwashing” agenda, with ulterior neo-colonialism motives attached. Teklu quotes Meles Zenawi’s (former Ethiopian Prime Minister) statement on Washington Consensus policies being inductive of more poverty in Africa, and US intervention detrimental to the development of the country, and groups climate action along with these issues. The green agenda imposed by the Paris Agreement is in this view also limiting Ethiopia and other LDCs’ capabilities to develop and is seen as a continuation of old dependence patterns of African countries. This last argument can be tied to the projected application of a “carbon tax” measure that would revert the revenue to LDCs, and can be compared to the policies of direct financial aid that have failed over the last decades, mainly in African countries.

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Another geopolitical argument against these agreements, from a LDC point of view, is that the example of the United States leaving the Paris agreement under Donald Trump should be followed by these countries, as a smart move that avoids economic disadvantages. From a progressive and cooperative standpoint, I argue that the withdrawal of the United States should not be seen as an example for LDCs. The US are the second biggest CO2 emitter in the world, and the biggest economy on the planet, hence their withdrawal is merely a continuation of the bad industrialization practices that truly harm the planet. Nonetheless, one can argue that Trump’s government decision was harmful, and still understand the withdrawal of LDCs for the sake of their development and industrialization. As will be argued next, there is indeed a relation between development and carbon emissions, and for LDCs, that argument is compelling and the reason why we take on a “mid-way” approach. However, the same reasons should not be evoked when speaking of a very developed and already pollutant country. 

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Another geopolitical intricacy regarding the US’s withdrawal is other big CO2 emitting countries such as China and India, were not concerned about President Trump’s decision. According to Teklu (2018), this is because the withdrawal meant that they would not have a “significant opposition”. The confusing part of the agreement is that officially it is considered “legally binding”, however, in case of disrespect for it, there are no penalizations for the transgressor country. In other words, actually achieving the goals that were promised before, is not legally binding (Touza, 2018). There is no capability to impose compliance. Other countries’ acceptance of Trump’s decision might not have a deeper explanation rather than the fact that no authority, in this case, can demote a withdrawal decision. In my view, this in itself shows how these deals are skewed against LDCs – despite their lower weight in carbon emissions relative to the industrialized nations, consequences for not complying with agreements like the Paris one are more easily applicable, due to their position of dependence and economic weakness.

Carbon emissions, growth, and development

My analysis of the strategic importance of global climate agreements for least developed countries (LDCs), and consequently, of how climate action may be coordinated equitably, departs from the relation between carbon emissions, economic growth, and human development. My scepticism on the effects of deals such as the Paris Agreement for LDCs, or the setting of short-term carbon neutrality goals (as happened in Ethiopia, Teklu: 2018) stands on the much-debated “emissions, energy consumption and growth nexus” (Apergis & Payne, 2010), which establishes a positive correlation between carbon emissions and economic growth.

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Effectively, there is extensive economic literature on this matter which seems to demonstrate that carbon emissions are tied to economic growth (Mardani et al, 2019; Wang et al, 2020), financial development (Wang et al, 2020), and human development (Costa et al, 2011) in a positive way. Teklu (2018: 1) tries to establish, though less rigorously, a similar relation in a graphical abstract, through a graphical comparison of per capita levels for CO2 emissions and Human Development Index (HDI) that shows a positive correlation.

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According to the Environmental Kuznets Curve (Bilgili et al, 2016) hypothesis, the nexus is especially prevalent for countries in an early stage of development, with the correlation between emissions and growth fading as income rises, up to a point where more economic growth starts meaning fewer emissions (Nguyen & Kakinaka, 2017) – which is only observed in the most advanced industrialised economies. This is due to technological innovation, rising human capital, and increasing consumption of renewable energies (Wang et al, 2020). However, there is no consensus on the validity of the EKC hypothesis, and some studies dispute the existence of the final stage - increasing output with decreasing emissions - for developing countries that have reached middle-income status. Narayan & Narayan’s (2019) analysis of 43 developing countries, for instance, only finds evidence of economic growth curbing the nexus for 35% of their sample, with income elasticity for emissions growing smaller in their latest stages of growth, but never really negative Regardless of one’s opinion on the EKC, it does not disprove the relationship between carbon emissions and growth/development for LDCs whatsoever (only for developing and advanced economies). As pointed out in the famous Inquiry into the Nature and Causes of the Wealth of Nations (Smith, 1776), coal, oil, and gas (pollutant energy sources) were the energy sources behind the Industrial Revolution, and I sustain that they will still be the driving force for countries that wish to become more industrialised, since they will remain by far the largest source of energy for the decades to come (EIA, 2017), with fossil fuels projected to still represent 77.5% of energy consumption in the world by the year 2040.

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This does not mean that LDCs should not exploit and even prioritize the use of clean energy, since in most of these countries, renewable resources are more abundant than non-renewables (Bugaje, 2006). This is, for instance, the case of Ethiopia with its massive unexploited hydropower, solar energy, and wind resources (International Trade Administration | U.S. Department of Commerce, 2021). Renewables have been becoming cheaper, being the cheapest source of energy in 2021 (Masterson, 2021), which goes against the widely-used price argument against energy transition. However, it is essential that LDCs also seek to explore their fossil fuel resources instead of becoming carbon neutral. This could mean essentially following the same development route that the developed countries have since the Industrial Revolution (exploiting coal, oil and gas heavily, and only looking at phasing those out after reaching a high level of development), or even better, follow a diverse strategy from now, exploiting all possibilities, since the knowledge available on how to exploit renewable energy is a lot more complete in this era. We can anchor the justification for a diverse strategy (using all available energy resources on the road to development, industrialization, and a higher income level) on three main points.

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First, the impact of LDCs’ carbon emissions is nearly insignificant on a global scale. For reference, the three biggest CO2 emitters in the world (China, India, and the United States) account for more than half of the planet’s total CO2 emissions (EDGAR database, European Commission), and a country like Ethiopia, which we have been using as an example, accounts for 1/16th of the United States’ per capita emissions. This shows that the impact of poorer countries multiplying their “CO2 emissions budget”, so to say, by 2, 3, or 4, would have a negligible impact on climate change and global warming, as long as the biggest polluters take steps to reduce their own “budgets”, even if in very small fractions.

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Second, the potential that is so far unexploited lies not only in renewable energy sources, but also in non-renewables - Ethiopia, for instance, was exploiting 0% of its coal, oil and natural gas resources in 2021(International Trade Administration | U.S. Department of Commerce, 2021) – and if these are correctly governed in a way that doesn’t involve the usual meddling by Western countries or corruption in their management, they can become important sources of income through exports.

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The third and final point is that, as demonstrated above, there is a correlation between carbon emissions and higher economic growth and development, all the most in the earliest stages of development, so fossil fuels and gas could help these countries reach a later stage, with better living conditions for their populations and a possibility to transition into clean energy-only economies when their emissions become actually significant on a world scale.

 

Why a middle-ground solution for LDCs is just and needed

 

If economic literature and data have any hard truths, one of them is that the most developed countries are the richest countries, and that the richest countries are also the most industrialized. The process of enlargement of a country’s productive capabilities is key to allow LDCs real development. If we take historical evidence as proof once again, we may say that the world’s biggest economies of today are countries that were able to develop not by specializing their industrialization process in activities that they had a comparative advantage in (as famous economist David Ricardo had suggested), but by evolving into “difficult industries” and adopting protectionist policies (Chang, 2010), until their economies were strong enough to handle global free markets.

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However, looking at today’s economies and current climate context, there is an emphasis on other dimensions of development that were forgotten by more ancient development theorists, since they were not at the forefront of their realities at the time. Chang (2010) refers to this as the “humanistic” dimension of development (the UNDP’s Human Development approach, also known as Amartya Sen’s capability approach), which focuses on giving people the possibilities and choices to have a fulfilled healthy life, with decent living conditions. These approaches are much more about enlarging people’s options and opportunities to achieve growth than they are about the economic prospects and industrialization seen in developed countries’ paths of growth.

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Nevertheless, these approaches to development, which typically focus more on environmental protection than on economic growth, might be unfair to mention when it comes to countries that were never industrialized, “developed”, or polluters, and that will be the primary victims of climate change consequences, such as the LDCs of sub-Saharian Africa. The rudimentary state of the economies of LDCs, which often rely on agriculture, fishing, cattle raising, and other climate-dependent activities, means that they also have lesser means to deal with the consequences of climate change. It is difficult to conceive how industrialization, which would be the means to solve this issue of vulnerability, can be achieved under a context of reducing emissions that, for example, Gabon (UN, 2021)   and Ethiopia have seemingly embraced, with the latest even projecting carbon neutrality by 2025 (Zubairu, 2021). These policy goals will necessarily undermine the great advantages of some LDCs. Ethiopia, for instance, loses the possibility of being a possible hydrocarbon producer and exporter (Teklu, 2018). The Paris Agreement does, indeed, reduce the freedom of nations to industrialize. For this reason, I call for a middle ground solution, where LDCs should seek a low-carbon future with guidelines that are appropriate to their level of development needs. However, since the challenges of adaptation to a carbon-neutral economy are different in the least developed countries compared with rich countries, rushing LDCs to achieve carbon-neutrality may not be the best developmental strategy just yet, when the costs of adaptation to new technologies and the transition are uncertain. This is why I believe that those goals should be pushed to a more long-term perspective in the case of LDCs. Not aiming for carbon neutrality gives these countries leverage to modernize and develop their economies, and at the same time, it is the already industrialized countries’ duty to support the responsibility of achieving global carbon neutrality as soon as possible. The main challenges of high- income countries in this transition are in cutting industrial emissions, residential energy efficiency, a new approach to transportation, and the redesigning of their electricity grid systems. Nonetheless, technological sophistication and capital are available. On the other hand, decarbonization in low-income countries presents different challenges like land-use change, provision of basic services, or private-sector development. Additionally, the vulnerability of LDCs is not only due to bigger exposure to climate change consequences, but because the institutional and socio-economic capabilities to adapt are not sufficient yet (Bowen and Fankhauser, 2011). To preserve equity, LDCs should be able to explore their natural gas resources and rise the current CO2 emissions until their economies are robust enough for the possibility of a smoother and self-financed transition while keeping sustainability as the long-term goal. For that solution to be successful, there’s a need for true commitment from the biggest industrialized economies, such as China, India, Russia, and the US to becoming carbon neutral or even carbon sequestrators. This is why the following - and final - part, will be centred on concrete solutions to the climate problem.

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Concrete measures – how to operationalize the “mid-point” solution

 

Curbing carbon emissions and global warming must first and foremost be the responsibility of those who contribute the most to it.

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Therefore, the most advanced economies and biggest polluters, such as China, India, and the US, but also other Western countries, should make an effort to heavily reduce their carbon emissions, by replacing fossil fuels with technologies that are already ready, or in development, for exploring renewable resources. At the same time, financial aid should, in my opinion, flow to LDCs, not as a reward for reducing carbon emissions - as happened in Gabon (CAFI, 2021), but as compensation for the effects of climate change that are already being felt all over the “underdeveloped” world (BBC, 2021). As Jackson (2009) defends, aid should also be directed towards helping these countries finance renewable energy exploration.

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Meanwhile, LDCs should be left to explore oil, coal, and gas freely in the short-run, while not undermining their use of renewable resources, at least until they reach middle-income status – in other words, for as long as such exploration’s developmental benefits are larger than the environmental costs. 

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Teklu (2018: 12) proposes a rather simple way to operationalize this: deciding on a certain mid-point of per capita annual CO2 emissions towards which countries must converge, in the span of 10 to 30 years. I believe that this would be a just and equitable solution, and it would grant that energy transition happens at each country’s pace, while reducing total global emissions (as long as the chosen point is under the current world average, of course). Richer countries, which already have the technology needed, would be made to act in the now, while LDCs would have their development unaffected until they reach a certain point of development and can sustain the transition more easily.

 

Conclusion

In this essay, I have leaned on historical, economic, natural science and geopolitical arguments to back my claim on climate action. I believe that the richest, most advanced, and most pollutant economies of the world should carry most of the burden when it comes to reducing CO2 emissions and containing global warming, with least developed countries being granted more leeway, at least in the near future. In my view, it would be doubly inequitable to apply the same proportion of restrictions to LDCs as to developed countries, since not only is their share of emissions relatively insignificant on a global scale, but their industrialization and development can also be affected if they are not allowed to raise their CO2 “budget” in the near future. Therefore, I also laid out some possible policies that can curb global warming – and specifically CO2 emissions – in the decades to come while relying mainly on the world’s biggest polluters for now. I do believe that this cooperation should be complemented with other measures that can help LDCs in creating conditions to exploit renewable energies only in the long term, without losing competitiveness. A carbon-neutral future is important and the way to go, but it should not be prioritized over development while the choice is to be made.

 

References

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​Wang, R., Mirza, N., Vasbieva, D. G., Abbas, Q., & Xiong, D. (2020). The nexus of carbon emissions, financial development, renewable energy consumption, and technological innovation: what should be the priorities in light of COP 21 Agreements?. Journal of Environmental Management, 271, 111027.

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