By David Fickling

You can think of the depressing outcome of the COP29 climate conference in Azerbaijan last weekend as a diplomatic echo of the outcome of the US election three weeks earlier.

In the US, progressives found themselves hemmed in by a surprisingly strong coalition of both traditional Republicans and a faction of working-class and non-white supporters whom they saw, perhaps naively, as their natural allies. At the United Nations climate conference in Baku, rich nations discovered that efforts to cut their own emissions and fund climate programs elsewhere on the planet were not enough for developing countries most at risk from global warming. planet.

Both situations are strong examples of one ambitious policy. Since the 19th century, conservatives propelled themselves into the electorate by arguing that their policies were the best way to achieve the wealth and independence that working-class voters sought. Those who oppose climate action are making a similar pitch to low- and middle-income nations: Environmentalism is a protectionist conspiracy to keep already poor nations poor. Only the fossil fuels they can provide the growth one needs to become rich. But rich nations will never be able to do enough to repay the debt that has been incurred.

It is a strong argument because there is a grain of truth in it. Consider the 86 countries that the World Bank considers to be “high income”. After the traditional colonial powers of Europe, Japan, North America and Oceania and their immediate neighbors in the Caribbean and Eastern Europe, they are all oil exporters.

Thanks to oil, the Arabian peninsula—a region that has been barely governable in the 13 centuries since the death of the Prophet Muhammad—now has the diplomatic clout to make or break climate policies. For countries still climbing the development ladder, the rapid growth of China and India (which together burn 70% of the world’s coal) looks like an attractive advertisement for a similar fossil-burning path to wealth.

In this context, world summits often boil down to calls for which side is most likely to bolster those countries at the bottom of the pile. Rich, climate-conscious countries must accept that they have lost this argument.

Take a look at the bargain made to boost the $100 billion a year pledged in 2009 at Copenhagen for climate change to $300 billion a year by 2035. The amount is insignificant compared to the trillions needed, especially when you consider how small the new funding is. In particular, it fails to compete with the allure of money that minerals offer.

Gabon, a Central African member of the Organization of the Petroleum Exporting Countries, is a case in point. With 2.5 million people, it often receives as much foreign direct investment as the Democratic Republic of Congo, home to more than 100 million. Another example is Guyana, the fastest growing nation in the world. Last year it received more foreign direct investment (FDI) than Taiwan or the Philippines and twice as much as the entire Caribbean.

Of the $31.3 billion in FDI that went to the 45 least developed countries in 2023, more than a third went to seven countries – Chad, Mauritania, Mozambique, Senegal, Sudan, Uganda and Tanzania – that are implementing or constructing projects oil export.

So what can rich nations offer as a substitute?

The advantage of oil is that oil fields and terminals borrow money and earn export revenues in US dollars, against the currency crises that plague poor countries.

If you were using greenbacks in 2021 to finance a wind farm outside Cairo, you’d be in trouble this year when the Egyptian pound fell by about a third of its value. There is little prospect that consumers will be able to pay high enough electricity bills to cover the interest payments.

The best answer is for rich nations to recognize that climate change really is a crisis and act accordingly. A $650 billion 2021 issuance of the International Monetary Fund’s Special Drawing Rights — an obscure quasi-currency known mostly only to central bankers — has played a decisive but unheralded role in protecting poor countries against damage from Covid-19. About $69 billion of that total is now given to climate finance.

What is needed is a much larger program for poor countries to buy the vast number of solar panels, batteries and wind turbines that the world can produce. These funds may not perform well in the strictest financial sense. However, the benefit to the world if every country can industrialize and become rich on the back of clean energy would be much greater.

*David Fickling is a Bloomberg Opinion columnist covering climate change and energy. Previously, he worked for Bloomberg News, the Wall Street Journal and the Financial Times.