Indonesia announced a new financing plan at COP27, and Denmark topped the CCPI : The Indicator from Planet Money For this week's series finale, we explain Indonesia's climate deal, why nobody came #1 in the CCPI's climate rankings and whether it's possible to grow an economy without increasing carbon emissions.

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More money, more carbon?

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SYLVIE DOUGLIS, BYLINE: NPR.

(SOUNDBITE OF DROP ELECTRIC SONG, "WAKING UP TO THE FIRE")

DARIAN WOODS, HOST:

It is Friday, and that means indicators of the week. And we've got a very special edition today.

WAILIN WONG, HOST:

All of this week we've been looking into economic solutions to the climate crisis. And to wrap up our series, we've each brought indicators that tell us something about the future of the planet.

This is THE INDICATOR FROM PLANET MONEY. I'm Wailin Wong.

WOODS: And I'm Darian Woods.

ADRIAN MA, HOST:

And I'm Adrian Ma. Today on the show, we look at whether growing economically also means growing your carbon footprint. Also, we look at how countries are stacking up in their efforts to reduce carbon emissions. And finally, we look at a deal to try and wean one of the world's biggest carbon emitters off coal.

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MA: Indicators of the week, climate edition - set the scene for us, Darian.

WOODS: My indicator of the week will be 62. So just a few years ago, the world made 62 times as much stuff - so cars and refrigerators and airplanes - 62 times as much stuff as we did in the 1800s. And over the same period, the world made also just over 62 times more carbon emissions, too.

WONG: I look like the thinking emoji right now. I'm stroking my chin.

MA: It's like a 1 for 1 increase.

WOODS: Pretty much. So there's been this very tight correlation between economic growth - you know, gross domestic product - and climate pollution. And it's pretty fairly simple intuition here. Like, GDP, that's the sum of all stuff produced in an economy. And making more stuff requires more energy. And that means more power plants. It means more fuel for trucks on the road, and more cows burping in the fields. So basically, looking at this, it kind of seems like you want to have your cake, you know, the wealth cake, and you also want to be able to have it, too, without hurting the planet.

MA: I'm just having a - like, a Homer Simpson moment trying to imagine a wealth cake.

WONG: What flavors are wealth cake?

MA: Oh, wealth cake.

WONG: Black deforestation cake.

MA: Oh, OK. Never mind. That doesn't sound so appealing.

WOODS: There is, like, a little bit of hope here. There are exceptions to this general principle - Germany, the U.K., Denmark, even in the U.S. In the last decade, all of these countries have gotten richer while meaningfully reducing their carbon emissions.

MA: What is going on here? Are they just, like, outsourcing their dirty work to lower-income countries?

WOODS: Yeah. But it's true that we live in a very globalized world. Manufacturing happens outside of the U.S. more than it used to. But these statistics that I'm talking about, that's irrelevant because the measure of carbon emissions is not the actual emissions that are coming out of the U.S. It is the emissions that are experienced in the totality of what we buy. So the iPhone, you know, which might have been produced using electricity from a coal factory in - I don't know - in Beijing, that is counted.

WONG: So then how did these countries do it? What are they - what's happening?

WOODS: So a lot of it's just about greener forms of energy, less coal, more natural gas sometimes or solar or wind. Like, the U.K. has moved away from coal in its electricity production. It is aiming to close its last coal plant in two years' time. Germany's been using higher electricity bills to subsidize solar panels and homes. And notice that all the countries that I listed are rich.

But in what's sometimes known as the Global South, there are billions of people in India and Indonesia and Nigeria. These people are going to be demanding more and more energy over the coming years. But 80% of all energy is still produced by burning fossil fuels. It's reliable, and it's cheap. But I think highlighting these exceptions to that rule does show us possible ways out of that tightly bound connection between GDP and carbon.

MA: OK. So that's the general correlation, right? GDP equals carbon. But Wailin, I think you were going to drill into some of the countries that have transcended that.

WONG: Well, transcend with kind of an asterisk. So my indicator is four. That is the ranking that Denmark got in the latest installment of the Climate Change Performance Index, or CCPI. It was released this week during COP27 in Egypt. The CCPI is an annual measure of how countries are doing on climate mitigation, and it ranks over 50 countries. These are the countries that account for over 90% of global greenhouse gas emissions. And Denmark topped the ranking this year at No. 4.

MA: Wait. OK. So I'm confused. Denmark topped the ranking, but they were also No. 4?

WONG: Yeah. So this is what I found really interesting about the CCPI. So three German environmental groups compile this ranking, and they set, like, a minimum threshold that countries have to hit. That threshold is being on track to limit warming to 1.5 degrees Celsius.

WOODS: Right. So that's the target that's been established at the Paris Agreement.

WONG: Yeah. And in order for that goal to be in reach, countries have to cut their emissions in half by 2030. And the groups that put together this index, the CCPI, say that no country is on track to do that right now. So they left the top three slots on the index blank. Denmark is ranked the highest, but that means being No. 4, not No. 1. And then the rest of the top five are Sweden, Chile, Morocco and India.

MA: OK. So Denmark is doing the best, not No. 1 though. So, like, what did they do to sort of come out on top?

WONG: The report highlights a couple of things. They say that the Danish government has committed to reducing emissions by 70% from 1990 levels, and they're going to commit to do that by the year 2030. And the Danish government has also adopted a corporate carbon tax.

WOODS: OK. Pretty serious - 70%. Where does the U.S. rank?

WONG: You want to guess?

WOODS: The greatest country on Earth - maybe No. 5?

WONG: Close - 52.

WOODS: OK. Not No. 5.

MA: But just to be clear, this is bad.

WONG: Yeah, it was bad. It's bad.

MA: OK.

WONG: Not good. Yeah, the U.S. is just below China. And then at the very bottom, rock bottom, Saudi Arabia and Iran.

WOODS: OK. So the U.S. has a lot of catching up to do if it wants to be in that top group with the Nords (ph), with the Scandinavians.

MA: But this is where we get to my indicator because if any country is trying to cut any carbon, it is probably going to cost money. No, wait. Actually, in fact, it's definitely going to cost money. And this is a - like, a persistent part of the debate about climate change because this is a real problem for lower-income countries.

But this week, there is actually a little bit of good news on that front. Just across the Indian Ocean from where the COP27 conference was happening, there was actually another summit of countries happening in Indonesia. So it was the G-20, which is like the G-7 - you might have heard of that - with just, like, a few more countries thrown in there. And what happened at this conference was countries like U.S., Japan and a handful of other wealthy nations, they pledged to help Indonesia reduce its reliance on coal burning within the next several years by pledging $20 billion. So that's my indicator, 20 billion.

And why Indonesia? Well, according to a recent report by the European Commission, Indonesia was the ninth-biggest emitter of carbon in the world last year. And according to the International Energy Agency, nearly half of that energy came from coal. So this climate-financing deal is reportedly the biggest of its kind so far. And if it works, it could be a model for similar agreements in the future.

WOODS: And are they just pledging the money? I mean, is this going to be real?

MA: Right. The word pledge does a lot of work here. The specifics of the deal, a lot of them haven't been hammered out yet, including, like, how the money is going to come to Indonesia, how they're supposed to spend the money. What we do know right now is that half of the $20 billion that is pledged is supposed to come from governments, from the U.S. and Japan, etc. And the other half is supposed to come from the private sector, entities like Bank of America and Citibank. And it's supposed to come through a mix of grants, loans and private investment.

WONG: That kind of sends up a little red flag for me because one of the episodes I did this week was about the links between debt and climate for emerging economies. As they need the money for climate mitigation and adaptation, they end up kind of being forced to take on debt. They are taking on loans, like bilateral loans, from other governments, or they borrow money in capital markets. And it often pushes them further into debt, which leaves them without enough money to actually do the climate stuff.

MA: So that is a concern. And, well, you heard it here. Wailin is going to be watching.

WONG: That's right. Nothing gets past me...

MA: (Laughter).

WONG: ...The G-20 watcher.

MA: It is worth noting here, though, that $20 billion is only supposedly the first step here. And there seems to be an understanding around this deal that it'll require more money in the future to really get off coal.

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WOODS: This episode of THE INDICATOR was produced by Brittany Cronin. It was engineered by Katherine Silva. It was fact-checked by Dylan Sloan and Sierra Juarez. Viet Le is our senior producer. Kate Concannon edits the show. And THE INDICATOR is a production of NPR.

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