In recent years, climate-related disasters have increased in frequency and intensity, leaving widespread destruction and suffering in their wake. The Philippines, devastated this year by super typhoons Carina and Enteng, was deemed the most disaster-prone country in the World Risk Index for the third consecutive year.
The Philippines’s precarious situation is shared by many others in the Global South, spanning across the underdeveloped countries of Latin America, Africa, and much of Asia. They are located to the south of their richer Global North counterparts in East Asia, North America, and Europe. The uneven economic development that has caused the disparity in climate resilience among these regions is evident and is a point of debate for many seeking compensation from the Global North.
Among the country’s attempts at responding to climate change was its successful bid in July to host the global Board of the Fund for Responding to Loss and Damage (L&D Fund). This fund is meant to serve as “climate reparations” that would assist countries vulnerable to the effects of climate change. This is to be funded primarily by the nations of developed economies that are generally more resilient to and responsible for climate change.
While billions struggle with an increasingly dangerous climate, the renewable energy transition in the Global North continues to lag in meeting global targets while being fueled by the extraction of resources from the Global South. As long as these arrangements predicated on endless profit generation persist, the energy transition, even with climate reparations, will be ineffective and self-defeating.
What Is the Current State of the Energy Transition?
To jointly address climate change, 195 countries of the United Nations Framework Convention on Climate Change signed the Paris Agreement in 2016. Among the primary goals of this agreement is to limit global warming to 1.5°C above pre-industrial levels. Gas emissions must peak by no later than 2025 and decline by 43 percent by 2030.
Signatories of the Paris Agreement pledge their own Nationally Determined Contributions (NDCs), which are planned measures for reducing emissions. These are made with the end goal of achieving net-zero emissions by 2050.
But for most countries, NDCs are not legally binding. Most major emitters will not likely achieve their NDCs based on current trends, according to a 2021 study by Communications Earth & Environment. The study also identifies that the rate of emission reductions should increase by 80 percent beyond current NDCs to limit global warming even by 2°C.
For the past century, the Global North has been responsible for 92 percent of excess global carbon emissions. Based on the concept that our atmosphere is equally owned by all of humanity, the results show that the Global North has surpassed its “fair share” of emissions.
As the main culprit behind global carbon emissions, the fossil fuel industry continues to exert its power to maintain the status quo. Fossil fuels have reached a record high consumption in 2023, according to this year’s annual report by the Energy Institute. The surge of licenses awarded this year mostly by developed countries for gas and oil exploration would only contribute to the still-increasing carbon emissions.
“Capitalists ang biggest polluter at destructor ng kalikasan, pero profit interest nila ang sinusulong ng government,” said Jonila Castro, an advocacy officer of Kalikasan People’s Network for the Environment (Kalikasan PNE). “Dahil sa kuntsabahan na ito, mayoryang mamamayan ang apektado, showing intensifying climate injustice.”
Why Are Market-Oriented Solutions Insufficient?
The Global North continues heralding its continuous growth, which is why most of the existing programs that supposedly aim to mitigate climate change remain market-oriented. The resulting inequitable arrangements are further worsened by mechanisms like the carbon credit system that profits from the crisis, according to the 2021 World Inequality Report.
Carbon credits are tradable certificates issued by the government to a company, obtained through projects that reduce emissions elsewhere. The scheme permits corporations to emit a certain amount of greenhouse gases as long as they invest in programs like forestation. This system is implemented in Europe, the United States, and some countries in Latin America and Asia.
If a company remains below its set emission limit, it can sell its unused credits to other enterprises that want to offset their emissions. This system merely profits from selling these credits but does not actually reduce overall emissions, said Khevin Yu, climate and energy campaigner of Greenpeace Philippines. Different types of carbon credits, in truth, do not deliver their intended mitigative effects, found a 2024 Science Based Targets initiative study.
“New frontier ang developing countries for carbon trading companies, lalo na sa mga area na malaki ang forest reserve like the Philippines and Indonesia,” said Yu. In 2022, the Philippine Department of Environment and Natural Resources announced that it would push for a carbon trading system. With fewer emissions, the Global South would be used by major companies to purportedly offset their own recorded emissions while still increasing overall global pollution.
Such practice of exploiting crises to make a profit has long been prevalent, entrenching the dilemma further to maintain corporations’ money streams. Amid increasing climate-driven hazards, some businesses find disasters as “the ideal time for profit, resource extraction, and reinforcing the business-as-usual status quo,” according to a 2022 report by the UN Office for Disaster Risk Reduction. As solutions are left at the behest of self-interested actors in the market, a cycle emerges: more risks are generated, creating viable profiteering opportunities yet again.
What is Decoupling?
Market-oriented solutions correspond to the general principles posited by the decoupling framework. This aims to separate the effects of sustained economic growth from its environmental impact by reducing or substituting resource consumption, still affirming corporations’ drive for unlimited profit generation.
Though signs of decoupling can be seen in some high-income countries, it is unlikely that absolute decoupling on a global scale can be achieved at the current pace to meet global targets, according to a report by the European Environmental Bureau. On the contrary, projections show that damage brought by endless growth would lead to an ecological collapse following recent trends.
Unused resources brought about by decoupling could also be pounced upon by expanded markets in a continuous drive to seek profit. Though renewable energy consumption increased in 2023, the use of fossil fuel is still around 14 times higher than the use of solar and wind energy, according to the 2024 state of the climate report.
Renewable energy has only been added to the energy mix to accommodate increasing energy demand instead of completely replacing fossil fuels. Some say this affirms the Jevons Paradox, where increases in efficiency may paradoxically lead to more resource consumption due to lower costs and resource availability that boost demand.
The expansion of the Global North’s “green” energy transition is sustained by the minerals provided by an already burdened Global South, said Yu. The environmental damage caused by the North’s mindless extraction extends to problems other than climate change, including poor socioeconomic conditions, ecological overshoot, and political instability.
What Does This Mean for the Global South?
To facilitate the transition to renewables, much of the raw materials that make up vital components for renewable energy are sourced from the Global South. South America contains more than half of the world’s lithium reserves while the Democratic Republic of the Congo (DRC) accounts for 70 percent of global cobalt production. More than half of these metals are exported to China, where 80 percent of solar panels and 75 percent of lithium-ion batteries are made.
Damage to biodiversity is often overlooked in the computation for L&D, especially when it is not directly affected by climate change. In South America, monitored wildlife populations fell by 94 percent on average, mostly due to extractive industries ranging from deforestation to mining.
Though mining contributes to the revenues of the Global South, it also worsens the already existing vulnerabilities of the population. Poor living conditions, health concerns, environmental hazards, and even armed conflict surround the operations of these mines. In the DRC, militias and rebel groups fight for control over the mines that provide them with funds, much of which can be traced back to high-income countries that boost the demand for these critical minerals.
With an economy oriented toward exporting raw materials, the Philippines is among the countries unable to benefit from its mineral wealth, said Castro. These extractive enterprises have immediate ecological ramifications in the country, where nickel mines are notorious for their environmental and health risks.
The nickel sourced from these mines is a vital element of the growing electric vehicle (EV) industry, and its extraction will have to increase to keep up with the spiking demand. Global EV sales rose to 14 million in 2023, a 35-percent increase from 2022 sales, according to the International Energy Agency.
Such outsourcing of damage to the Global South follows the longstanding trend of exploitative extraction of the Global North, with an estimated USD10 trillion drain in the South per year due to unequal exchange of goods and services.
What Would be a Truly Just Transition?
The current economic model, driven by the demand for profit and unlimited growth on an inherently limited planet, has long been pointed out by scientists as a barrier to a genuinely just transition. The Global North's inexorable demand for resources reinforces a cycle of extraction, rendering climate reparations on their own insufficient to make up for damages wrought in the Global South.
Though as much as USD700 million has been pledged to L&D, it will seem like a drop in the ocean compared to the predicted USD580 billion needed to address climate disasters.
“L&D is a victory of the people’s climate movement but it is not enough to avert the climate crisis,” said Eco Dangla, an advocacy officer of Kalikasan PNE. The people of the Global South must demand reparations from the Global North and ensure that their governments use the funds for rehabilitation and pro-people and environmentally-oriented development, he added.
Rather than orienting their economies toward the profit-driven export of raw materials, the underdeveloped countries of the Global South may prioritize state-led domestic industrialization instead that does not extract beyond the environment’s regenerative capacity. A stronger economy no longer dependent on superpowers and capable of manufacturing its own renewable technology may give the Global South its leverage to pressure the Global North to expedite its net-zero emissions efforts.
But amid breaches in six of our nine planetary boundaries, a mere replacement of the type of energy is not enough in the long run. For advocates, a successful shift must be underpinned by a different system that abandons the extractive and profiteering principles that made the proliferation of fossil fuels tenable.
“Transitioning to renewable energy alone will not avert the impending planetary collapse if we will not move away from the capitalist framework,” said Dangla. This demand is consistent with the recommendation forwarded by experts in the 2024 State of the Climate Report, which included the call to adopt “an ecological and post-growth economics framework that ensures social justice.”
A post-growth setup capable of providing the needs of all while living within the planet’s limits is feasible, as argued in a 2023 paper by Sustainability: Science, Practice and Policy. To do so, societies across the globe must embrace economic democratization, where production is driven not by endless profit but by need satisfaction through citizens’ collective ownership and decision-making in key economic structures.
That shift becomes more urgent for the survival of many countries long beleaguered by climate change impacts, such as the Philippines which continues to contend with stronger typhoons. A new political-economic structure that transcends the profit-oriented ideology may finally facilitate a truly just global transition and secure humanity’s future. ●
