Rich countries should ditch privileged debates over the legacy of colonialism and pay off poorer countries’ carbon instead, an influential investor has told The Independent.
The call for former colonial powers to help foot the bill for developing nations’ carbon production comes ahead of the climate change conference, Cop26, and after the publication of a landmark report about the dire state of the climate.
Hendrik du Toit, founder of asset management company Ninety One, which has £130.9 billion of assets-under-management, believes such an approach could win more global support for the battle to combat climate change.
At present, Mr du Toit said, rich nations are asking developing countries to give up on efforts to become prosperous, by cutting back the energy intensive industries that their economies rely on. Instead, wealthy countries need to make a more radical offer: buy up much of the carbon that these nations produce and help fund their transition to Net Zero emissions.
“Instead of all the intellectual arguments about decolonising things, let’s actually be fair in respect of decarbonisation,” du Toit said. “The rich world is aware of the damage of the colonial legacy. Instead of talking about that in lecture halls in the West, let us rather support the victims of climate change, ie people in emerging markets, to make their energy systems clean and green.”
“Currently in the West we’re obsessed with righting the wrongs of the past. In this case we have the opportunity of avoiding a major disaster by being fair and inclusive,” he added.
Western countries like France, Germany, the UK and others, have enjoyed the wealth created by the industrial revolution and often outsourced the most carbon intensive industries elsewhere, exporting pollution.
Now, the EU has put a price on carbon produced by domestic industry and is seeking to do the same with carbon intensive imports. It offers “too much stick and too little carrot” Mr du Toit said.
“They intend to punish the emitters of carbon outside their borders, that is not enough to encourage change. They should incentivise decarbonisation as well,” he said.
A global carbon pricing mechanism combined with richer countries buying the carbon generated by poorer nations could offer a solution. There should also be a “debt for carbon” mechanism to give something back to developing countries if they take on the risk of decarbonising their energy systems, he said.
“The carbon-heavy developing countries will not simply switch the lights off. That is why we [Ninety One] are arguing for a constructive approach from the developed world. Capital for transition and incentives in the way of debt forgiveness should form part of the plan,” Mr du Toit said.
Ninety One, of which Mr du Toit is chief executive, is also a member of the Institutional Investors Group on Climate Change which comprises asset managers who together oversee 39 trillion euros.
The Covid-19 pandemic was a good example of richer countries failing to see the benefit in supporting developing nations effectively.
“Until we have vaccinated the vast majority of the world population, we will face an uphill battle against the pandemic. The fight against climate change is similar,” he said. “It will only succeed if it is global and therefore inclusive. Emissions do not respect borders.”
