Mahmoud Mohieldin: Funding alone without technology transfer is not sufficient (interview)

Investments and participation in “mitigation” and grants in “adaptation”

The developing world does not need new promises, it just wants commitment to specific numbers, projects, and timetables

The message of the developing countries from the Sharm El-Sheikh summit has reached the developed countries: “Enough of unfulfilled promises and unfulfilled promises!”

There is a determination from the Sharm El-Sheikh presidency to take the Loss and Damage Fund to its main station, framework and mechanisms

Dialogue: Shaaban hadia- Habeebah Gamal

Dr. Mahmoud Mohieldin, the climate pioneer for the Egyptian presidency of the Conference of the Parties to the United Nations Convention on Climate Change (COP27), and the United Nations Special Envoy for Financing the 2030 Agenda for Sustainable Development, as I knew him in the lecture hall at Cairo University, is always optimistic, and has solutions and proposals to open new windows for a solution, and this may be what is most likely. He became the first Egyptian and Arab to hold a prestigious position in the World Bank, first vice president of the bank for several years, and then a special envoy of the Secretary-General of the United Nations to finance the 2030 Agenda for Sustainable Development.

Mohieldin, who comes from a large political family, was chosen to be a climate pioneer for the Egyptian presidency of the COP27 Conference, because of his economic experience, linking his economic work with his political background, which produced a consensual personality capable of bringing together stakeholders and strengthening links in climate action between official government parties, the private sector and civil society. .

Mohieldin has published more than 75 research papers and studies in the fields of finance and investment economics, financial reform, and financial market performance analysis. He is also an article writer in a number of major Arab and foreign newspapers.

Mohieldin has a vision that always favors developing and poor countries and believes that they have the right to claim compensation for the disasters and tragedies they have been subjected to because of actions and policies that the developed world has been asked about since the first industrial revolution until now.

The password has always been to link work to sustainability and continuity to be more positive, and to search for economic outputs to attract all parties and mutual benefit.

He also has proposals to solve the financing crisis for projects and adaptation programs in developing countries and has a vision of how to balance climate action and achieve international climate goals.

Dr. Mahmoud Mohieldin said, in an exclusive interview with Al-Ain News, that he is optimistic about the outcomes of the COP28 summit in Dubai next November.

And to the text of the dialogue:

What is your vision of the priorities of the COP28 climate conference in Dubai next November / December?

In light of the accelerating things the world is going through, there are many developments – which we hope will be better than they are now – it may be difficult to predict what will happen, but in light of what is currently in place, there are some specific issues assigned to the Conference of the Parties to the United Nations Convention on Change The upcoming climate cop28 in Dubai, as is usual for United Nations climate conferences, and the issue is formed in three dimensions, the first, what is completed from the previous summit cop27, as was the Sharm el-Sheikh summit 2022, where it completed the decisions made in the Glaxo summit 2021, and secondly, the developments on the scene in light of the adoption Bearing in mind that the climate issue has political, economic, financial and development dimensions, and the third dimension is what constitutes issues, and it is entrusted to the presidency of each summit from the arrangements and priorities of its presidency and the proposals that are developed to focus on it, and are always compatible with the Paris Agreement, and what the conspirators expect, but each summit has some Things that give the Conference of the Parties an additional advantage and a special flavor, and this is the meaning of choosing a different country every year to host this important international conference, and there is a shame over the course of the twenty-seven years that different countries host every year the Climate Summit, to gain new momentum.

What distinguishes the previous climate conferences, at least since the Paris summit, which is a watershed in the climate summits?

What distinguishes each summit is that there are those who added to the summit legal regulatory dimensions, as happened in the Paris Summit 2015, with the climate agreement or the famous Paris Agreement, and there are those who focused on the idea of ​​participation between the public and private sectors, as is the case in the Marrakesh Summit 2016. Known as “climate champions” or climate pioneers, and participation between the private sector, non-governmental organizations, and civil society, although it existed before, but this summit put it in a more organized framework, as well as the Glaxo cop26 summit, due to the interest in preserving the 1.5 degree Celsius target And the emphasis on the goal of the Paris Agreement represented in limiting the increase in the average global temperature, and reducing carbon dioxide emissions by 45% to reach net zero in the middle of the century, and the Sharm el-Sheikh summit cpp27 had several dimensions, which was confirmed by the Minister of Foreign Affairs, Ambassador Sameh. Shukri, President of the Twenty-seventh Conference of the Parties, a few days ago, in an article on the Loss and Damage Fund, and affirming that there is a determination from the presidency of the Egyptian summit to take this fund to its main station, framework, and mechanisms, after achieving a diplomatic and political victory, as described by the Secretary-General of the United Nations, Antonio Guterres. In addition, Egypt has given the issue a different attention (and I am glad that I was at a conference a few days ago and the Mayor of London for Financial Affairs spoke that we must stop using the word pledges), which means that the message has clearly reached the developed world from the Sharm el-Sheikh summit, expressing the state Developing countries have had enough of vows that are not implemented and promises that are not fulfilled, and therefore it is more important to adhere to specific numbers with a timetable, financial numbers and specific projects.

The adaptation gap and mitigation gaps

What about the gap between the actual needs of developing countries for climate financing allocated to adapt to climate change and international covenants?

This issue specifically gave Egypt an importance that was lacking, although what is stipulated in the Paris Agreement, and the recommendation that financing be equal between adaptation and mitigation, but the practical application proved that there is a bias towards mitigation, but the recent report of the Intergovernmental Panel on Climate Change says that we need to reduce Harmful emissions average at least 45-50% until 2030, and instead of reducing these emissions, we increase them by more than 15%, which makes the first line of defense, which is “mitigation”, has large gaps, so the second line of defense, “adaptation”, and Egypt must be addressed It achieved great work, whether in the method of preparation, as it was a participation between the presidency of the Sharm El-Sheikh Summit and the Climate Pioneers, and brought out the Sharm El-Sheikh Adaptation Agenda, all of which are vital matters (food and agriculture – water and restoration of natural systems and nature – coastal and oceans – human settlements – infrastructure and early warning systems), including This includes enabling solutions for planning, and all these axes have been focused on with their financial and technological dimensions, so that these axes and mechanisms are practically on the map that can be referred to continuously in the issue of adaptation.

big polluters

Why so much attention to the issue of adaptation in particular?

This is natural because the Arab countries, Africa and developing countries, including Egypt, suffer from great dangers and effects as a result of emissions about which others are asked “and those who do not like to be asked”, and some of them are content with sermons and guiding sermons, and “preaching is first”, and there is an important article for the English economist, head of research The precedent in the World Bank on “elephants in chambers.” These large elephants originate from major polluters, developed countries and emerging markets, and developed countries are more responsible because they are cumulatively responsible for the tragedy we have been experiencing since the beginning of the nineteenth century and the industrial era, and it is still continuing, and this is a point Fundamental to the debate (and this is due to what Esther Duflo, the Nobel Prize winner in economics, said) who says that the production and consumption behavior of developed countries is the reason, so we do not blame countries such as India, China or African countries because these countries produce in patterns developed in developed countries, and often They will be exporters of commodities and products that Western countries consume and need, and the Secretary-General of the United Nations always says, “We are at war with climate change.” And if it is a war, there must be lines of defense, and the first line of defense is the burden on developed countries and for another important reason, also if Technology and appropriate financing have not been provided to developing countries. There is no alternative for these countries to change. We should not tell developing countries to get out of coal or even natural gas, although at the same time here in Washington – where I hold – advertising campaigns through the means of communication and the media, whose message is “Save the environment.” Save the climate and use natural gas), in the United States they encourage the use of natural gas, at a time when developing countries are prevented or warned against using natural gas, and financing is prevented from countries, including African countries, especially since most of them are indebted, and they are referred to borrow from commercial financial institutions With great benefits, few grace periods and exchange rate risks.

Loss and Damage Fund

What about the Loss and Damage Fund, how will its mechanisms be formulated at the Dubai Summit?

The loss and damage fund will be subject to negotiation, because every country has internal obligations, and there are countries interested in the matter, and some countries have an active civil society. To reduce emissions, and secondly, to fulfill its financial pledges, especially with regard to technology. The $100 billion, as indicated by the Sharm el-Sheikh summit, eliminated the alleged contradiction between financing development and financing climate action, and brought about an actual and philosophical shift. Talking about the transition to new energy, here we are talking about the goal. The seventh of the sustainable development goals, and if we are talking about water, here we are talking about the sixth goal, and if we talk about water, agriculture and health, and these are the goals of sustainable development, Egypt, in cooperation with the cop26 summit, the financing gap was monitored, which reached the minimum trillion dollars, meaning That the $100 billion pledged since 2009, and confirmed at the Mexico Summit and the Paris Summit, does not represent more than 10% of the current minimum required for financing climate action, and this means that this pledge needs to be reviewed.

First global assessment

Are you waiting for cop28 summit to fix this imbalance?

This flows into the Dubai Summit, as one of its mechanisms and discussion is the global assessment, or the global assessment survey, which is a mandate for the first time since the Paris Agreement, and this includes basic axes (mitigation efforts – adaptation efforts – financing – damages and losses), and these are the basic lines of defense, Based on this evaluation, many things will become clear that commitments must be associated with the results of the evaluation.

Is the link between finance and technology transfer a focus of COP28?

I envision the high-level United Nations climate pioneer for the UAE presidency of the Conference of the Parties to the United Nations Convention on Climate Change COP28 Razan Al Mubarak, according to her background, interest and long experience in the field of biodiversity and nature conservation to give this issue special attention, great not only in organizing but also in focusing on Technology transfer, and the link between technology and financing – funding alone is insufficient – financing is in all sectors, including mitigation and adaptation, in almost all fields, technology is an essential element, in the last 10 years the cost of solar energy has declined by about 90%, and so on in all areas related to mitigation and adaptation, Including green hydrogen and advanced batteries. There are many researches whose results will be announced from time to time. Developing countries must have the right to access this technology without increasing the burden on them. Here I refer to the book of the historian and economist, American energy expert Daniel Yergen (The New Map: Energy, Climate, and the Conflict of Nations 2020 ), talks about that financing is not only related to technology, but also what technology can achieve in terms of breakthroughs, as there are different levels of knowledge about advanced technology that humanity expects and this must be shared by developed and developing countries.

Are we talking here about the possibility that the Dubai Climate Summit COP28 or the upcoming United Nations negotiations will discuss the obligation of developed countries to transfer technology in addition to the financial obligation?

We cannot say that it is a kind of compulsion, rather it is a kind of “induction,” for in order for there to be a change, the matter is linked to three main determinants (financing, technology, and behavioral change). From the point of belief that change must be brought about, and there are those who take it from an economic point of view that change has an economic return, and there are those who are motivated by fear of the continuous deterioration of life and nature, and those who are worried about the hordes of immigrants harming the “climate refugees”, so that the writer Ian Breiman In his book, he pointed out that the unrest in some countries, such as Syria and Yemen, caused waves of displacement of those whose water resources were affected and who fled from poverty to crowded cities. Special problems and conflict over water are one of the threats to stability in developing countries.

What is your view of the calls for accelerating the disposal of fossil fuels versus those who advocate the adoption of carbon capture and storage technologies as a way to reduce global warming emissions?

I do not look at these as alternatives except in the short term. It must be emphasized that there is a fair energy strategy, and what is known as a just transition of energy. I mention here as an example that the most important output of the Glaxo Summit on projects for developing countries was the promise to provide $8.5 billion to South Africa to get out of coal. Investing in renewable energy, which has not yet been officially met, here we must first measure the effects on the affected parties, in the sense that we arrange matters, first before the decision to exit or change, we must look at the societal impact, we cannot ask developing societies to give up on Methods of producing or generating energy, whether coal or fossil fuels – as well as countries without providing them with the means, tools, or financing to move to new low-emission methods. Logic and order here is important to see the societal impact and the groups that will be harmed from this transition – and then the policy or demands for exit From polluting energies, this is the logic of things, and within the framework of the Just Energy Transition Initiative, we proposed to the Group of Seven as developing countries that are not intensively using coal, but we have other fossil sources such as petroleum, that our emissions-intensive sectors such as cement, iron and steel, fertilizers, and maritime transport, there are business owners and the state Also, they are willing to exit or switch to reduce emissions, but they want financing, and here we return once again to the issue of providing appropriate technology and appropriate financing. Without either party (financing-technology), these countries have no alternative.

There are those who call for sanctions or compulsory decisions and placing restrictions on developing countries that do not turn to new energies. Can this be applied?

The balance of power in the current world does not allow anyone to impose his opinion or decisions on others, so the matter must be viewed from the logic of mutual benefit, participation and collective solidarity. Otherwise, no transition or commitment will take place, even if financing is prevented from financing institutions or institutions are intransigent, as they are The loser in that because she wastes herself losses.

As a climate leader, which would you prefer to serve the climate and accelerate emissions reduction and which would you recommend if a negotiation took place at the Dubai Summit?

As a climate pioneer with any measure that would reduce harmful emissions at any level and not taking a biased ideological position with or against, all countries and all ideas do not reduce emissions with any possible technology and financing available, and I have faith that the matter will only be done through negotiation and dialogue to reach consensus, there are points of view and arguments And justifications for each party, as for me as developing countries that benefit from all these solutions, getting rid of fossil fuels serves us if financing and technology are provided, or there is a reduction in emissions and an improvement in the use of carbon reduction and storage technologies, this also serves us, for example in green hydrogen projects, even If we have the financing, capacity, technological solution and green energy, there is the issue of infrastructure and energy transfer from production sites to utilization centers and interconnection lines as well as storage. Transportation and storage are important sectors that need infrastructure – and this needs technology.

In light of the state of global recession, declining growth and high inflation, has climate action been affected and has the climate issue ranked behind in the priorities of countries?

Formulating priorities is the core of climate action currently, and what the Sharm El-Sheikh summit did was to focus on linking development plans with climate financing, in a way that serves investment and increased production or renewable energies. There may be significant material costs in transitioning to low-carbon energies, but in the long run this will be Investing, saving, and reducing expenses, and here banks must participate in financing this transformation, and there must be incentives from countries to move because the benefit here will spread to society and the state, not just the individual.

The role of the World Bank

With the assumption of a new president of the World Bank Group, Ajay Banga, how do you see the role of this institution, which had many comments and accusations of failure in the past years in supporting climate financing or supporting countries affected by the effects of climate change?

I do not deny that the World Bank had a great and distinguished role in the fields of climate, and it was a race against others, and it has the best specialists in this field, and I worked with them for 10 years – and I am still in a relationship with many of them – but the rule related to financing can be solved according to the proposal that I submitted 50/50% financing for mitigation and adaptation. On average, development banks provide 75% of the financing for mitigation measures, while logic says that instead of crowding out the private sector in this, especially since mitigation projects are profitable or generate an economic return for the private sector, which is best able to To carry it out and benefit from it, and there are no many risks or losses, such as the transition to renewable energy, and other projects, but the problem is with adaptation projects, as the return is always general economic or social in general for the state or society in general, and not material that can be calculated on the individual level or Institutional, and the latest figures revealed that only 3% of private sector financing in Africa is for adaptation, and here the leading institutions, if they have the ability to finance, must direct it to adaptation and not mitigation, just as countries do not have to borrow commercially or at a high cost in order to benefit from financial institutions He suggested that a 1% cost be calculated on loans to developing countries from international financial institutions for the technical aspect and administrative costs, with a grace period of no less than 10 years, and a repayment period of no less than 20 years, so the financing period is 30 years, and it is sufficient for countries to bear and guarantee It is sufficient that they borrow to solve a crisis that has nothing to do with “emissions.” I hope that the sum of $100 billion will be the pledges of rich countries in grants, not loans. So the protection of beaches in Alexandria or the coasts, what is its economic return to the state, and it does not welcome or favor the entry of the private sector because it It will not generate a direct return, as these projects must be funded by international financial institutions.

middle trap countries

But did you officially submit this proposal to the international bodies or did you update the officials of these institutions about it?

I talked about it on all occasions and activities, the most recent of which was the meetings of the African Bank in Sharm El-Sheikh, and banks welcome such a proposal, but you need someone to bear the cost from development banks to reduce costs, and interest from 3-5% to 1%, and from here we say that the difference is from the 100 billion dollars – and what I am saying is not something unprecedented, because there are countries that obtain financing from low-cost sources for a period of 5-10 years, and even the new fund – in the International Fund gives a grace period for middle-income people, but the financing cost is somewhat higher than 1% and is only limited On the lower-income countries, and we are not one of them = and the middle-income countries that were called “the middle-trap countries” because they are in a region that does not know how to take grants – Germany, before the Ukraine crisis, was borrowing at an interest rate of less than 1%, and Egypt took loans at 6-7%, and even the same The parties sometimes, and this is a clear example of lack of justice and inequality, and this must be taken into account, as the cost of financing for European countries is 1/5 compared to developing countries such as Egypt.

Are international institutions serious about solving the funding crisis?

The heads and leaders of these institutions support the climate issue, but the crisis is in the ability of these international institutions to provide financing, as the financing gap amounts to a trillion dollars compared to all that these financing institutions offer does not exceed 100-150 billion dollars – and here we are talking about the importance of the participation of the private sector.

The role of the World Bank

With the assumption of a new president of the World Bank Group, Ajay Banga, how do you see the role of this institution, which had many comments and accusations of failure in the past years in supporting climate financing or supporting countries affected by the effects of climate change?

I do not deny that the World Bank had a great and distinguished role in the fields of climate, and it was a race against others, and it has the best specialists in this field, and I worked with them for 10 years – and I am still in a relationship with many of them – but the rule related to financing can be solved according to the proposal that I submitted 50/50% financing for mitigation and adaptation. On average, development banks provide 75% of the financing for mitigation measures, while logic says that instead of crowding out the private sector in this, especially since mitigation projects are profitable or generate an economic return for the private sector, which is best able to To carry it out and benefit from it, and there are no many risks or losses, such as the transition to renewable energy, and other projects, but the problem is with adaptation projects, as the return is always general economic or social in general for the state or society in general, and not material that can be calculated on the individual level or Institutional, and the latest figures revealed that only 3% of private sector financing in Africa is for adaptation, and here the leading institutions, if they have the ability to finance, must direct it to adaptation and not mitigation, just as countries do not have to borrow commercially or at a high cost in order to benefit from financial institutions He suggested that a 1% cost be calculated on loans to developing countries from international financial institutions for the technical aspect and administrative costs, with a grace period of no less than 10 years, and a repayment period of no less than 20 years, so the financing period is 30 years, and it is sufficient for countries to bear and guarantee It is sufficient that they borrow to solve a crisis that has nothing to do with “emissions.” I hope that the sum of $100 billion will be the pledges of rich countries in grants, not loans. So the protection of beaches in Alexandria or the coasts, what is its economic return to the state, and it does not welcome or favor the entry of the private sector because it It will not generate a direct return, as these projects must be funded by international financial institutions.

middle trap countries

But did you officially submit this proposal to the international bodies or did you update the officials of these institutions about it?

I talked about it on all occasions and activities, the most recent of which was the meetings of the African Bank in Sharm El-Sheikh, and banks welcome such a proposal, but you need someone to bear the cost from development banks to reduce costs, and interest from 3-5% to 1%, and from here we say that the difference is from the 100 billion dollars – and what I am saying is not something unprecedented, because there are countries that obtain financing from low-cost sources for a period of 5-10 years, and even the new fund – in the International Fund gives a grace period for middle-income people, but the financing cost is somewhat higher than 1% and is only limited On the lower-income countries, and we are not one of them = and the middle-income countries that were called “the middle-trap countries” because they are in a region that does not know how to take grants – Germany, before the Ukraine crisis, was borrowing at an interest rate of less than 1%, and Egypt took loans at 6-7%, and even the same The parties sometimes, and this is a clear example of lack of justice and inequality, and this must be taken into account, as the cost of financing for European countries is 1/5 compared to developing countries such as Egypt.

Are international institutions serious about solving the funding crisis?

The heads and leaders of these institutions support the climate issue, but the crisis is in the ability of these international institutions to provide financing, as the financing gap amounts to a trillion dollars compared to all that these financing institutions offer does not exceed 100-150 billion dollars – and here we are talking about the importance of the participation of the private sector.

If these financing institutions were important in the past, today they are more important, just as the conditions of these institutions for dealing with developing countries in structural and financial reform projects should not put these countries between two choices (quantity or quality). Countries should not be given a choice between efficiency or quantity in the apparatus. Banking, you should not stipulate in talking about financial reform the choice between efficiency and volume, so here aid must be in the form of investments or contributions and partnerships and not loans so as not to burden developing countries, as the whole system – the type of funding for development work in general and climate work in particular must That it be investments and participation in “mitigation” and grants in “adaptation”, and do not forget that compensation is like what happened in the floods in Pakistan, even with proof of damage, it does not compensate those affected. compensate.”

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