2 October 2023 3:06 pm
Climate change puts sovereigns at downgrade risk, study finds

Climate change puts sovereigns at downgrade risk, study finds

Aug 7, 2023

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Climate change puts sovereigns at downgrade risk, is found in a study that simulated the economic impact of climate change on current sovereign credit ratings.

Climate change puts sovereigns at downgrade risk, study finds

By Mark John

 

The above-featured image is of  A man walks past a coal-fired power plant in Shanghai
A man walks past a coal-fired power plant in Shanghai, China, October 14, 2021. REUTERS/Aly Song/File Photo

 

Summary

  • Rising emissions scenario leads to 59 downgrades
  • Paris Agreement path would minimise credit impact
  • Heatwaves already seen damaging global economy

 

Aug 7 (Reuters) – A global failure to curb carbon emissions will lead to rising debt-servicing costs for 59 nations within the next decade, according to a study that simulated the economic impact of climate change on current sovereign credit ratings.

Among them, China, India, the United States and Canada could expect higher costs as their credit scores fall by two notches under a “climate-adjusted” ratings system, the study published in the Management Science journal on Monday found.

“Our results support the idea that deferring green investments will increase costs of borrowing for nations, which will translate into higher costs of corporate debt,” researcher Patrycja Klusak said of the study led by the University of East Anglia (UEA) and the University of Cambridge.

Rising debt costs would be just one extra facet of the overall economic damage which climate change is already causing. Insurance giant Allianz estimates that recent heatwaves will already have shaved 0.6% points off global output this year.

While ratings agencies acknowledge the vulnerability of economies to climate change, they have so far been cautious in quantifying those risks in their ratings exercises because of uncertainties about the likely extent of the damage.

The UEA/Cambridge study trained artificial intelligence models on S&P Global’s existing ratings and then combined that with climate economic models and S&P’s own natural disaster risk assessments to create new ratings for various climate scenarios.

A downgrade to 59 sovereigns emerged from a so-called RCP 8.5 scenario of emissions that keep rising. By comparison, 48 sovereigns experienced downgrades between January 2020 and February 2021 during the turmoil of the COVID-19 pandemic.

If the planet manages to stick to the goal of the Paris Climate Agreement, with temperatures held under a two-degree rise, sovereign credit ratings would under the simulation see no impact in the short-term and only limited long-term effects.

A worst-case scenario of high emissions through to the end of the century would on the other hand result in higher global debt-servicing costs, rising up to the hundreds of billions of dollars in current money, the model found.

While developing nations with lower credit scores are seen hit hardest by the physical effects of climate change, nations with the highest ranking credit scores were likely to face more severe downgrades simply because they have furthest to fall.

“There are no winners,” Klusak said in an interview.

The findings come as regulators around the world seek to better understand just how much damage to economies and the global financial system to expect from climate change. A European Central Bank paper last year urged greater clarity in how those risks were being built into credit ratings.

S&P Global Ratings has published the environmental, social and governance (ESG) principles used in its credit ratings which include reference to the risk of economic damage from climate change and the costs associated with mitigating it. It declined to comment on the UEA/Cambridge study.

Fitch Ratings pointed to its system of “ESG Relevance Scores” as including factors such as exposure to environment impacts as one component in its assessments.

“These are longstanding and increasingly important rating factors which we continue to weigh in our analysis and publish frequent research and commentary upon,” it said in response to a request for comment.

Climate change puts sovereigns at downgrade risk

Reuters Graphics

Writing and reporting by Mark John; Editing by Hugh Lawson

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Today calls for appropriate use of technology in education

Today calls for appropriate use of technology in education

Jul 26, 2023

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Today’s calls for the appropriate use of technology in education are getting increasingly louder, for it is paramount to prepare for a more hopefully sustainable future.

The above-featured image is for illustration and is credit to UNESCO.

2023 GEM Report out today calls for appropriate use of technology in education

  • By: GEM Report

The sixth in the GEM Report series, Technology in education: A tool on whose terms?, urges countries to set their own terms for the way technology is designed and used in education so that it never replaces in-person, teacher-led instruction, and supports the shared objective of quality education for all.

The report is being launched today at an event in Montevideo, Uruguay, hosted by the GEM Report, the Ministry of Education and Culture of Uruguay and Ceibal Foundation with 18 ministers of education from around the world. It proposes a four-point compass that policy makers and educational stakeholders can use when deciding how to deploy technology in education:

1. Is it appropriate?

Using technology can improve some types of learning in some contexts. The report cites evidence showing that learning benefits disappear if technology is used in excess or in the absence of a qualified teacher. For example, distributing computers to students does not improve learning on its own without the engagement of trained teachers. Smartphones in schools have  proven to be a distraction to learning, yet fewer than a quarter of countries ban their use in schools.

Learning inequities between students widen when instruction is exclusively remote and when online content is not context appropriate. A study of open educational resource collections found that nearly 90% of higher education online repositories were created either in Europe or in North America; 92% of the material in the OER Commons global library is in English.

2. Is it equitable?

During the COVID-19 pandemic, the rapid shift to online learning left out at least half a billion students worldwide, mostly affecting the poorest and those in rural areas. The report underlines that the right to education is increasingly synonymous with the right to meaningful connectivity, yet one in four primary schools do not even have electricity. It calls for all countries to set benchmarks for connecting schools to the internet between now and 2030 and for the focus to remain on the most marginalized.

Internet connectivity is highly unequal

 

1. 2023-gem-figure-1-mp4

Percentage of 3- to 17-year-olds with internet connection at home, by wealth quintile, selected countries, 2017–19
Source: UNICEF database.

3. Is it scalable?

Sound, rigorous and impartial evidence of technology’s added value in learning is needed more than ever, but is lacking. Most evidence comes from the United States, where the What Works Clearinghouse pointed out that less than 2% of education interventions assessed had ‘strong or moderate evidence of effectiveness’. When the evidence only comes from the technology companies themselves, there is a risk it may be biased.

Many countries ignore the long-term costs of technology purchases and the EdTech market is expanding while basic education needs remain unmet. The cost of moving to basic digital learning in low-income countries and of connecting all schools to the internet in lower-middle-income countries would add 50% to their current financing gap for achieving national SDG 4 targets. A full digital transformation of education with internet connectivity in schools and homes would cost over a billion per day just to operate.

4. Is it sustainable?

The fast pace of change in technology is putting strain on education systems to adapt. Digital literacy and critical thinking are increasingly important, particularly with the growth of generative AI. This adaptation movement has begun: 54% of countries have defined the skills they want to develop for the future. But only 11 out of 51 governments surveyed have curricula for AI.

In addition to these skills, basic literacy should not be overlooked, as it is critical for digital application too: students with better reading skills are far less likely to be duped by phishing emails.  Moreover, teachers also need appropriate training yet only half of countries currently have standards for developing their ICT skills. Few teacher training programmes cover cybersecurity even though 5% of ransomware attacks target education.

Sustainability also requires better guaranteeing the rights of technology users. Today, only 16% of countries guarantee data privacy in education by law. One analysis found that 89% of 163 education technology products could survey children. Further, 39 of 42 governments providing online education during the pandemic fostered uses that ‘risked or infringed’ on children’s rights.

It also requires ensuring that the long-term costs for our planet are taken into account. One estimate of the CO2 emissions that could be saved by extending the lifespan of all laptops in the European Union by a year found it would be equivalent to taking almost 1 million cars off the road.

The report calls for us to learn about our past mistakes when using technology in education so that we do not repeat them in the future. The #TechOnOurTerms campaign calls for decisions about technology in education to prioritize learner needs after assessing whether its application would be appropriate, equitable, evidence-based and sustainable. We need to teach children to live both with and without technology; to take what they need from the abundance of information, but to ignore what is not necessary; to let technology support, but never supplant human interactions in teaching and learning.

Read the report

Climate change: Which countries will foot the bill?

Jul 21, 2023

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Climate change: Which countries will foot the bill? The question is on everybody’s mind, especially within those countries with historically the littlest impact on today’s situation.

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Climate change: Which countries will foot the bill?

By  and 

Summary

  • Countries at odds over which should pay climate finance
  • EU wants China to contribute to climate funds
  • China among countries not currently obliged to pay

BRUSSELS/BEIJING, July 21 (Reuters) – Record-breaking heat in China. Wildfires forcing Swiss villages to evacuate. Drought ravaging Spanish crops. As the costs of climate change rack up, a debate is surging among governments: who should pay?

The question has been in the spotlight amid this week’s climate talks between the U.S. and China, where the world’s two biggest economies tried to find ways to work together on issues ranging from renewable energy deployment to climate finance ahead of this year’s U.N. climate summit, COP28, in Dubai.

Given China’s rapid economic growth and increasing emissions, pressure has grown on Beijing to join the group of countries providing this funding.

During the talks in Beijing, U.S. climate envoy John Kerry said the two sides would continue to discuss climate finance over the next four months, before the COP28 conference starting Nov. 30.

“It’s difficult to argue that countries like China, Brazil or Saudi Arabia should still be put at the same level as the least developed countries and small island developing states,” a diplomat from one European Union country told Reuters.

The EU, today the biggest contributor of climate finance, has lobbied to expand the pool of donor countries that provide it.

Climate finance refers to money that wealthy countries pay toward helping poorer nations reduce CO2 emissions and adapt to a hotter, harsher world.

So far, the few dozen wealthy countries obliged to make these payments have not delivered cash in the amounts promised. That list of financing nations was decided during U.N. climate talks in 1992, when China’s economy was still smaller than Italy’s.

Now, some countries are calling for China to contribute. U.S. officials including Treasury Secretary Janet Yellen have noted that Chinese contributions would boost the efficacy of the U.N. climate fund.

Other countries under similar pressure include Qatar, Singapore and the United Arab Emirates, three of the world’s richest nations in terms of GDP per capita.

So far, China has resisted calls that could group it alongside wealthy nations.

In a meeting with Kerry on Tuesday, Chinese Premier Li Qiang stressed that developed countries should deliver their unfulfilled climate finance commitments and take the lead in cutting emissions, according to Li’s office. He suggested developing countries could make contributions “within their capabilities.”

That resistance suggests the effort faces serious challenges. Changing the official U.N. donor list would require international consensus.

“There is much too much resistance among countries like China and Saudi Arabia to touch the official definition,” one EU official said on condition of anonymity.

Advocates for the change argue that an expansion needs to happen before a new – and, likely, far bigger – U.N. target for climate finance kicks in after 2025. Countries still need to negotiate the size of that target and who will contribute to it.

“All countries that are able, must contribute to global climate finance,” said Ambassador Pa’olelei Luteru, who chairs the Alliance of Small Island States.

The bigger issue, Luteru said, is which of the poor and most vulnerable countries will be in line to receive it.

WHO IS RESPONSIBLE?

The U.N. climate financing arrangement is based on the principle that rich countries have a greater responsibility to tackle climate change, because they have contributed the bulk of the CO2 emissions heating the planet since the industrial revolution.

The United States’ historical CO2 emissions are bigger than those of any other country, but China today is the world’s biggest CO2 emitter in terms of pollution produced each year.

Countries will face the question of historical responsibility at COP28, as they aim to launch a new fund to compensate vulnerable states for costs already being incurred in climate-fuelled natural disasters.

The EU dropped its years-long resistance to that fund last year, but on the condition that a larger group of countries pay into it. Countries have not yet decided who will contribute.

The United States has been cagey about making payments that could be seen as reparations for climate change.

Some countries not obliged to contribute to UN climate funds have done so anyway, including South Korea and Qatar. Others have begun channelling aid through other channels.

China launched the South-South Climate Cooperation fund in 2015 to help least developed countries’ tackle climate issues, and so far has delivered about 10% of the $3.1 billion pledged, according to think tank E3G.

That’s a fraction of the hundreds of billions that Beijing is spending on its Belt and Road Initiative, backing projects including oil pipelines and ports.

Such arrangements allow countries to contribute without obligation, although if done outside of U.N. funds they can face less stringent criteria for public reporting – making it harder to track where the money is going and how much is paid.

Byford Tsang, a senior policy advisor at E3G, said a Chinese offer of more climate finance would be a “win-win” for Beijing. “It would earn China diplomatic clout, and pressure Western donors to raise their stakes on climate finance,” he said.

Some vulnerable countries, frustrated with the flagging finance to date, are looking to new sources for cash. The Barbados-led Bridgetown Initiative is pushing for a revamp of multilateral development banks so they can offer more support for climate projects. Other nations have rallied behind a global CO2 levy on shipping to raise funds.

Reporting by Kate Abnett in Brussels and Valerie Volcovici in Beijing; Editing by Katy Daigle and Stephen Coates

Valerie Volcovici covers U.S. environment and energy policy from Washington, DC. She is focused on climate and environmental regulations at federal agencies and in Congress. She also covers the impact of these regulatory changes across the United States. Other areas of coverage include plastic pollution and international climate negotiations.

COP 28 Agenda — Phase Down Of Fossil Fuel Inevitable & Essential

Jul 19, 2023

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COP 28 Agenda — Phase Down Of Fossil Fuel Inevitable & Essential

COP 28 Agenda should encompass a Phase Down of Fossil Fuel that is, at this stage, an Inevitable & Essential step towards a more healthy future because, as we all know, Fossil Fuel ‘Addiction’ Is Sabotaging Every Sustainable Development Goal.

Here is how  in CleanTechnica sees it.

When COP 28 kicks off in Dubai on November 30, it may be the world’s last real chance to tackle the challenge of an overheating planet finally.

Steve Hanley

 

 

The COP 28 Climate Summit is scheduled for November 2023 in Dubai. The president of the conference is Sultan Al Jaber, who just happens to be the head of Adnoc, the national oil company of the United Arab Emirates, of which Dubai is a part.

“Wait!’” we hear you cry. “At a time when the need for urgent climate action is apparent — the heat index in the Middle East on July 18 reached 152 degrees F (67 degrees C) — the next head of a critical climate conference will be an oil executive? Is this a joke?” The answer is yes, that is exactly what is happening here, and no, it is not a joke.

 

 

The backlash against Al Jaber has been strong. The optics of this situation are just all wrong. What were the people who made this decision thinking? But before you turn away in disgust, give a listen to what Al Jaber told The Guardian recently:

“Phasing down fossil fuels is inevitable and it is essential — it’s going to happen. What I’m trying to say is you can’t unplug the world from the current energy system before you build the new energy system. It’s a transition — transitions don’t happen overnight, transition takes time.”

Al Jaber started the storm of criticism shortly after he was named to head the conference when he said the world’s emphasis should be on lowering fossil fuel emissions instead of a phaseout of fossil fuels themselves, which is a key demand of more than 80 countries.

Al Jaber told The Guardian he welcomed the scrutiny. “When we signed up to the hosting of COP 28, we knew exactly what we were signing up to. I don’t think there has ever been a country that has hosted the COP that did not get this type of pressure or heat from activists and media, so that’s part of the game. The scrutiny sometimes also makes us dig deeper into issues, understand better, analyse more to draw better conclusions. Never have I said that I have all the solutions, or I have all the answers.”

Last week, Al Jaber met with representatives from 40 nations to lay out his specific proposals for COP 28, which fell into four main topic areas.

COP 28 & The 1.5°C Goal

The Paris agreement required countries to hold global temperature rises “well below 2°C” above pre-industrial levels, while “pursuing efforts” to stay within 1.5°C. At COP 26 in 2021, world governments agreed to focus on the more stringent goal of 1.5°C. Since then, some governments have tried to refocus the discussion on 2°C, but Al Jaber has made it clear from the outset that his plan is based on the tougher goal. “This plan is guided by a single north star, and that is keeping 1.5°C within reach,” he told the assembled ministers and government officials.

Kate Hampton, chief executive of the Children’s Investment Fund Foundation, who contributed to the COP 28 plan, said,  “The commitment to 1.5°C is particularly important. The presidency has recognized it is time to accelerate the essential and inevitable end for fossil fuels. The challenge now for the presidency is to ensure delivery across a comprehensive agenda, which can only be achieved with a transformational plan for mobilizing finance.”

National Plans

At COP 28, governments will conduct for the first time a “global stocktake” that will set out the progress countries have made on the emissions reduction commitments — known as “nationally determined contributions” or NDCs — they made in Paris.

The stocktake is certain to find that the world is way off track to meet its Paris goals, but the COP presidency has decided against naming and shaming individual countries. Instead, all countries will be required to submit updated NDCs in September that are sufficiently tough to meet the 1.5°C goal. In line with that requirement, the UAE itself has submitted a revision to its NDC that contains emissions reductions of 40% compared with a business-as-usual approach.

Phase Out Or Phase Down?

Al Jaber emphasized that this effort would entail “the phase down of fossil fuels,” which he said was “inevitable and essential.” The wording is significant. He was heavily criticized two months ago for repeatedly referring to the “phase out of fossil fuel emissions,” which observers took to mean that oil and gas companies could carry on extracting fossil fuels as long as the resulting carbon dioxide was somehow captured. But scientists have warned against using carbon capture and storage technology as a “free lunch” to excuse continued extraction.

Nevertheless, the “phase down” language will disappoint the more than 80 countries that want COP 28 to pass a commitment to phasing out fossil fuels entirely.

Clean Energy

Commitments to double energy efficiency, triple renewable energy capacity to 11,000 GW globally, and double hydrogen production to 180 million tons a year by 2030 will be put to governments at COP 28, where they are expected to be agreed to.

COP 28 & Reality

Romain Ioualalen, global policy lead at Oil Change International, told The Guardian, “Recent history has shown that more renewable energy does not automatically translate into less fossil fuels. COP 28 will only be a success if its presidency sets aside the interests of the oil and gas industry and facilitates a clear outcome on the need for a decline of all fossil fuel production and use, as well as a rapid phase-in of wind and solar. The only way we’ll build a new energy system that is both clean and fair is by actively phasing out the old.”

Al Jaber wants to formulate a plan to get the world’s biggest oil and gas producers to reduce their greenhouse gas emissions in line with the 1.5°C target — this at a time when those companies are fleeing any promises made previously as they go panting after more and bigger profits from selling their climate-killing products.

 

 

To activate his plan, he intends to bring fossil fuel executives to COP 28, despite the objections of many climate advocates who well remember that there were more fossil fuel advocates in Egypt last year for COP 27 than government representatives. The Guardian says if Al Jaber can get the companies to address their duty to the environment, “it would be an astonishing step forward for climate action.”

When Al Jaber first spoke to oil and gas companies earlier this year, he focused on what they could do to make their operations less carbon intensive by improving their extraction efficiency and plugging leaks of methane. These are known as scope 1 emissions, because they are fully under a company’s control. But critics pointed out that approach ignored scope 3 emissions, which are by far the greatest impact of fossil fuels. Those are the emissions created when oil or methane is burned by customers.

Last Thursday, Al Jaber adjusted his message in response to that criticism. “Let us end the reductive discussion of scope 1 v scope 2 v scope 3. We need to attack all emissions, everywhere — one, two, and three.” That is a huge victory for climate activists.

Who Will Pay?

Talk is cheap. It is “put up or shut up” time for fossil fuel companies. Their argument is that the transition to renewables and a phaseout of fossil fuels will be too costly, but that fails to take into account the direct and indirect cost of a warming planet. By some accounts, fossil fuel interests get the benefit of nearly $7.5 trillion in direct and indirect subsidies every year. No less a personage than Elon Musk says it will cost $100 trillion to transition to a zero-carbon economy, but sticking with a business-as-usual approach will cost far more — $130 trillion.

Al Jaber called for “a comprehensive transformation” of the World Bank and other international finance institutions, and for private sector funding to be brought in. He wants to make sure that a commitment by rich countries to provide $100 billion a year to poor nations is finally fulfilled. He also repeated the demand from UN Secretary General António Guterres for a doubling of finance for developing countries to adapt to climate impacts.

The Takeaway

COP 27 last year was an unmitigated disaster where oil companies got everything they wanted. Climate advocates are right to be concerned that this year’s conclave will be another debacle. But … Al Jaber is making the right noises. He is talking the talk. Now it remains to be seen whether he can walk the walk. The world has run out of chances to get this right.

Featured image by Kyle Field | CleanTechnica

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Stop Categorizing North Africa With Middle East

Jul 18, 2023

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Stop Categorizing North Africa With Middle East, advises PeacePro telling Global Peace Index it diminishes the chances of Africa being seen as one continent. So here is the argument.

Stop Categorizing North Africa With Middle East – PeacePro Tells Global Peace Index

By ForeFront NG Admin II, 18

…Says MENA categorization makes it difficult to see Africa as one continent

A peacebuilding think tank in Nigeria on the aegis of ‘Foundation for Peace Professionals’ also known as PeacePro has urged global bodies, academic institutions and research groups to stop categorizing North African countries with the Middle East under the acronym of MENA  Middle East and North Africa).

PeacePro noted that such conflicting categorization by global bodies such as the World Bank, World Health Organization and others was creating none existing barrier between North African countries and the rest of Africa, thereby making it difficult to see Africa as one and to create social, economic and psychological integration in the continent.

Executive Director of PeacePro, Mr Abdulrazaq Hamzat, who stated these while engaging Institute of Economics and Peace (IEP), the producer of global peace index on popular social media platform Twitter, questioned the rationale for using such categorization in the global peace index report.

Hamzat said; “Why is Africa usually divided into 2 on the global peace index report? This division has consistently raised questions in our sessions at Foundation for Peace Professionals (PeacePro)”.

The IEP ambassador also said that his organization is currently working on an African based enlightenment report, which is an extract from the global peace index, to create further awareness on GPI report and the extraction of North Africa to Middle East in the Global Peace Index report has been a major point of contention, making it difficult to visualize Africa as one continent, with its data scattered across different regions.

Responding to Hamzat’s inquiry on Twitter, IEP Global Peace Index noted that, for regional analysis, IEP splits Africa into sub-Saharan Africa and MENA, adding that it was consistent with the World Bank grouping.

However, Hamzat stressed that even though, it was consistent with other categorization including that of the World Bank, Peacepro was yet to understand the rationale for such categorization thus, open for enlightenment on the subject.

Hamzat further said that it was important to note that, in politics and academia, North African countries are commonly grouped with the Middle East under the umbrella of MENA, a development which has been questioned by many people, including in North Africa.

As a regional identifier, MENA is often used in academia, military planning, disaster relief, media planning (as a broadcast region) and business writing.

However, Hamzat noted that there was no MENA region amongst the United Nations Regional Groups, nor in the United Nations geoscheme used by the UNSD.

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