Guest post from Hannah Stoddart, currently managing Oxfam’s advocacy and influencing in Rwanda (but normally Head of Policy, Food and Climate Justice at Oxfam GB)
Last week Oxfam launched its first ever report condemning the fossil fuel industry as the main barrier to action on climate change. Oxfam joins a growing movement that recognises that tackling the power of the fossil fuel industry – its financiers and the governments who prop it up – is at the heart of effective action on climate change.
So far, so good. But as the author of the report I can testify to the widespread – and necessary – debate that this report prompted internally within Oxfam. And if these kinds of debates rage somewhere like Oxfam – where there probably isn’t a single staff member who doesn’t recognise climate change as a threat to development and poverty reduction – then we need to get a few things right if we are going to build the low-carbon future so desperately needed.
The first is equity. We need to match the reality that up to 80% of known fossil fuel reserves need to stay in the ground, with an equally urgent reality that poor countries need to develop – and that at least some of that development will inevitably rely on fossil fuels. Yes there are huge opportunities offered by low carbon economies, not least in delivering energy access to the rural poor, and these must be harnessed urgently. But developing countries also need the ‘slack’ in the short-term to create decent jobs and revenues for government spending, even if those might be unavoidably more energy or fossil fuel-intensive.
This ‘slack’ must be provided by developed countries reducing their fossil fuel emissions deep and fast – even modestly accounting for equity would suggest emission reductions in the North of at least 10% per annum, starting immediately. This is why development organisations including Oxfam need to be campaigning vociferously for the North to break its fossil fuel addiction. We need to resist the temptation to think that great campaigning on mitigation is ‘Greenpeace’s job’.
The second is finance. Not just the climate finance from rich to poor countries that is obviously a deal-breaker. But rather the enormous and relatively unhindered global financial flows to the fossil fuel industry. We’ve all read the Carbon Tracker report – we know the drill about ‘unburnable carbon’. But what is never emphasised strongly enough is that carbon bubbles are inflated by a concoction of tax breaks and subsidies that effectively ‘de-risk’ fossil-intensive investments, and a failure to embed all the hidden costs (climate impacts, public health, environmental degradation etc). It is this which ensures that fossil fuels continue to be more ‘financially viable’ than low carbon alternatives. So if we care about equity – in making low carbon development affordable for developing countries and making it a more viable choice – we need to disrupt the cosy relationship between the fossil fuel industry, financiers and governments that keep fossil fuels cheap and alternatives more expensive. This is not an environmental concern but fundamentally a development one.
The third is being wary of apparent ‘win-win’ solutions that do not work for poor people. The most obvious of these is a blanket call to ‘end fossil fuel subsidies’. The IMF killer stat on $1.9 trillion in annual subsidies to fossil fuels is great – I quoted it probably about four times in the report. But this should not mask the need to embark upon fossil fuel subsidy reform carefully, and to ensure associated public spending measures that compensate vulnerable people who lose out. There are plenty of examples of good and bad subsidy reform referred to in Oxfam’s report, and reform should be guided by important questions. How is the teacher in a developing country who gets the bus to work going to be affected? Will they be out of pocket?
Importantly, we need to be very wary of the underlying market fundamentalism that at times underpins calls from institutions like the IMF to end fossil fuel subsidies – which often has as much to do with their distaste for any government intervention in the market as it does with tackling climate change. Subsidies should not become a dirty word – not least because building a low carbon future will necessarily involve massive subsidies, albeit for low carbon alternatives.
By talking about fossil fuels at all, Oxfam has stuck its neck out into territory traditionally considered to be the preserve of green groups – and rightly so. But it is these three things that we development folk need to get right – so that we can make sure the path to a fossil-free future is a fair one.