Dr Laura Marsiliani from our Department of Economics and Co-Director Centre for Environmental and Energy Economics (CE3) comments on her recent attendance at COP27 as a member of Durham University observer delegation and the significance of the conference being held in Sharm el-Sheikh.
It is of paramount significance that this year UNFCCC COP27 is held in Africa, the continent hosting a quarter of global biodiversity and the second-most populous. Climate change is expected to impact deeply on Africa’s human and eco-systems, yet Africa only accounts for 2-3 percent of global carbon emissions. This does not sound right. For the first time in the history of COP, climate justice and reparation for ‘loss and damage’ are formally spoken of at COP27. Developing nations argue for compensation to be granted for historical carbon emissions by industrialized economies, while developed countries wish liability to be ruled out from any agreements that COP27 will hopefully bring forward.
What if the private sector could harness its ingenuity and help to solve the impasse of ‘Climate Responsibility’? Clean technology in developing countries is very expensive, e.g., a lithium battery capital cost can be four times higher than in the UK. According to the Porter Hypothesis, businesses that develop clean innovation in response to a push for better environmental standards accrue a competitive advantage and improve their international competitiveness. This is beyond the role played by big multinational corporations as we observe that clean innovation is often developed by small and medium enterprises (SME) (see this and last year’s finalists of the Earthshot Prize). What if firms possessing competitive know-how and skills invested into Africa’s clean technology market?
At the 2021 World Economic Forum, Ghana has adopted the principle of responsible business conduct (RBC) and corporate social responsibility standards by investors. Other countries will follow suit. Thus, a match from heaven between green innovators and recipients can be realized, together with a win-win situation for the environment and the economy. Durham University has recently established the Global Smart Hub at Durham University Business School, providing research-based solutions to North-East SMEs who are interested in investing in the Global South. The North-East of England has already remarkable expertise in the renewable energy sector that could easily be transferred into Africa by savvy investors. Navigating different cultural norms, institutions and regulatory mazes may be daunting, and that is why organizations such as the DUBS Global Smart Hub can be of value.