Indonesia President: Hormuz Changed the Economics of Climate Action | Opinion

Detailed summary

"We must rewire the global financial architecture to meet developing countries’ needs. That will take decades—time we do not have." ...

The COP climate summits have never been short on ambition. But follow-through has fallen short. As fiscal pressures mount in developed countries, many are retreating from their climate-funding commitments to the developing world, however articulate the calls for justice.

For developing countries, the crisis in the Strait of Hormuz marks a turning point. Like many Southeast Asian neighbors, Indonesia, home to almost 300 million people, was acutely exposed. Before the crisis, 60 percent of Southeast Asia’s crude oil imports and a third of its gas imports came from the Middle East. The crisis exacted an immediate price for our reliance on fossil fuels. Meanwhile, rising seas along our coasts and devastating wildfires, fueled by this year’s strong El Niño, exposed the greater cost of our collective inaction.

For decades, climate negotiations have been trapped in a prisoner’s dilemma. What made economic sense for individual nations—relying on cheap, reliable fossil fuels—has had disastrous consequences for the world. But Hormuz has tipped the scales. Dependence on imported fossil fuels is now financially unsustainable. Renewable energy has become a matter of hard national interest: economic security, self-sufficiency in a precarious world and, ultimately, national independence.

Many will contend that renewables have been cheaper for years. This overlooks the different economics of adding renewable capacity and transforming energy systems and retiring fossil-fuel infrastructure. While all nations confront this test, developing nations must weigh the latter’s expense and time required against the pressing demands of poverty reduction, development and industrialization, all dependent on cheap, reliable energy.

That it took a crisis of this magnitude to force such a reckoning speaks to the failures of the COP process to date.

Even if every commitment were honored, development banks and donor aid could not meet the $1.3 trillion a year developing countries need by 2035.

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Opening of the article, excerpted from Newsweek. To read the rest, open the article on the publisher's site.