The U.N.’s COP27 Climate Change Conference is now in its second week and is due to end Friday. Since the summit began last Sunday numerous proposals have been floated in an attempt to deal with the prickliest global climate issues, including how to repay developing countries for the damages brought by climate-related disasters. U.N. secretary-general Antonio Guterres also issued a stark warning at the beginning of the conference: “Cooperate or perish.”

For the most part, the world is not on track to meet the climate goals agreed upon in the 2015 Paris Agreement. Global emissions are on track to reach new record highs this year, and the United Nations’ 1.5 degrees Celsius warming target is increasingly becoming out of reach. However, according to The Economist’s global energy and climate innovation editor Vijay Vaitheeswaran, who attended COP27, there’s also some reason for optimism.

“So the picture is not great, but it’s maybe not as bad as some of the speakers in the opening of the climate change summit indicated,” Vaitheeswaran said in an interview with Marketplace’s Sabri Ben-Achour about the latest on the summit. “The pace of deployment of clean energy, particularly, around the world has been quite fast in the last 10 years, thanks to the collapsing price of solar, for example, and other forms of renewable technologies that have become a lot cheaper.”

The following is an edited transcript of their conversation.

Sabri Ben-Achour: So I guess first, really, we should talk about the state of climate change as it is now. The U.N. Secretary-General Antonio Guterres said, “We’re on a climate highway to hell.” CO2 levels are now 50% higher than they were before the Industrial Revolution. How bad is all that?

Vijay Vaitheeswaran: So the picture is not great, but it’s maybe not as bad as some of the speakers in the opening of the climate change summit indicated, including the Secretary-General, Al Gore, and a litany of horrors that were unveiled by other world leaders. The climate change picture is getting worse. We know we have some of the hottest years on record recently confirmed yet again. And we’re blowing past the goal that was set by the United Nations Paris Accord to try to contain the warming to 1.5 degrees Celsius — it’s a bit of a magic number to try to minimize the harm that’s done to the Earth from various forms of climate impacts — we’re going to blow right past that. There’s really no realistic chance of containing warming within 1.5 degrees. We recently argued in a cover story last week the reasons why. But the U.N. hasn’t caught up with that, or at least politically, they’re still sticking with “Keep 1.5 Alive.” That’s the mantra of COP. So that’s not good news. On the flip side, actually, we’ll see probably not as bad on the upside in terms of climate change increasing the temperature of the earth or other forms of harm, than we previously thought. The pace of deployment of clean energy, particularly, around the world has been quite fast in the last 10 years, thanks to the collapsing price of solar, for example, and other forms of renewable technologies that have become a lot cheaper. Frankly, it’s the cheapest way to build new power plants anywhere in the world, cheaper than new coal or new gas, is to put up solar plants. And for those sorts of reasons, a more rapid deployment of clean energy, we’re actually seeing something like the International Energy Agency say they think fossil fuels will peak by 2030, coal, oil and gas.

Ben-Achour: Well, given all that, what would you say the mood of the summit was?

Vaitheeswaran: Whenever you go to a climate summit, like these COP summits at the UN, and I’ve been to a number over the years, it’s always a mix of gloom and doom, because the picture is basically not great, right? At the same time, you find that is motivating actions, and sometimes it’s not on the official U.N. stage. So there was a lot of optimism actually for coalitions of the willing, that is, corporate alliances combined with a couple of countries that get together to announce partnerships on carbon credits, or philanthropies announcing big amounts of money for adaptation funding. And so you’re finding a huge amount of bottom-up action. And that’s what we saw last week in the first week of COP. So I think that part is enthusiastic and optimistic. We still need the world to act in concert because this is the most global problem. So we still need the U.N. process to work and that’s where there’s more pessimism.

Ben-Achour: One of the more difficult issues has been this argument between developing countries and rich countries, in which rich countries are, you know, responsible for more greenhouse gas emissions, but a lot of developing countries, some of whom have very little in the way emissions, are paying more of the price and form of climate disasters or rising sea level. I’m curious, from a moral perspective, are all countries on that same page?

Vaitheeswaran: If you say what is the official negotiating position, the answer is no. There is no way that a number of the developing countries, certainly not the United States, is going to accept an outcome that says, “You are legally responsible, and you have to pay reparations for having gotten rich burning fossil fuels.” Right, that’s the nub of it when we call it “loss and damage.” What it means is the harm that particularly the developing world will suffer, which didn’t yet have a chance to grow rich, to industrialize the way that the rich world did, want the rich world to pay a lot of money and to accept responsibility. The U.S. will never accept that, as well as some other rich countries that are quietly reading in America’s coattails without speaking up, because of course it would open a can of worms. It becomes really unlimited liability lawsuits, you could imagine where it would go, and politically, we will, in the U.S. body politic, are not going to pay reparations, certainly not what the Congress that’s likely to be in place in a few days. So the bottom line is that framing is not likely to succeed even if there’s some tokenism. There might be a bit of talking shop, maybe a few billion here, a few billion there thrown in there. But the developing countries that are pushing for that scored an own goal by demanding that China and India also be included in those reparations, in the loss and damage contributions. Now China, actually the moral case is pretty strong. China is a pretty rich country. I lived there for almost a decade for a magazine covering it. There’s a lot of wealth in China and it burned a lot of coal — it’s still burning a huge amount of coal. But India, there is no way a country that is still largely poor that has yet to really industrialize the way it wants to is ever going to pay these sorts of reparations. So the politics of this are falling apart, frankly, at Sharm el-Sheikh.

Ben-Achour: Well, I mean, that said, lower-income countries do want and need some assistance either reducing their own emissions or coping with the consequences of climate change. Are they going to get it, whether any responsibility is acknowledged? Either way, I mean, are they going to get help?

Vaitheeswaran: I think the answer there is a little bit brighter than that moral question we just dealt with. They are going to get more help. Some of this will come through the old-fashioned way, that is official donor aid bilaterally from countries like Britain. And the United States as well has increased its funding for adaptation and for other sorts of ways of helping developing countries cope with these problems. There’s also philanthropic money — the Rockefeller and Gates Foundations announced big initiatives, you know, measuring in the billions of dollars, as well as in terms of sort of programmatic help for developing countries, technical help in coping with agriculture, for example, where smallholder farmers are going to deal with the double-whammy of too little water, meaning crops that are suffering from drought, but suddenly too much water as we saw in Pakistan with the massive floods recently. So they’re going to need technical help with those things. We are seeing forms of assistance. Now they’re nowhere near the scale of the tragedy that’s going to come. But we’ve got the marker down for scaling up these sorts of fiddly on-the-ground ways to help that I think actually make a big difference.

Ben-Achour: The U.S. has proposed a carbon credit system where developing countries, poor countries, they lower their emissions, and then they sell credit for doing that to companies so the companies can use that as offsets for their own pollution. How feasible is that? How popular is that?

Vaitheeswaran: So this is an interesting idea. So in theory, anything that will get more money from the rich world to developing countries to build out the renewable energy sectors, to power down and reduce coal use is a good thing. When we look at the scenarios for how we clean up the energy system in the next 20-30 years, most of the money that’s going to be needed has to flow to emerging markets. And by official estimates, we find there’s a short gap — a sixth of the money that’s needed is getting there, maybe even one-tenth only. That is, we need to have a vast increase. And the obstacles to those include things like foreign exchange risk, country risk, project risk, you know, there’s lots of reasons why the vast flows of capital in the rich world are not going to these projects in the developing world. So if this new mechanism can provide some sort of state-level guarantees, some transparencies, some authentications of those credits that, in fact, a country is reducing its coal use and building legitimate new projects in clean energy that are verified, that’s great. The danger, though, is that if it’s not done with rigor, it’ll just end up as another greenwashing exercise. And that’s the worry.

Ben-Achour: Well, what ultimately do you think is going to come out of this summit? What concrete results might come of this summit?

Vaitheeswaran: So these U.N. summits are talking shops, right? They happen every year, and this one is a little COP, they call it every five years, they have a big COP. Last year in Glasgow was a very big COP. And so the expectations have to be in the right place. There’s no major breakthrough that’s anticipated. It’s not even on the cards. Areas where there’s likely to be some discussion, as we discussed, is loss and damage, the reparations issue. I don’t think there’ll be a resolution on that for the politics are too hard. On climate financing, though, I think there’s a lot of action that’s happening informally through coalitions of the willing. We see even as the world leaders shift to Indonesia for the G20 summit, in a sense, geopolitics is entering the fray. We’ve seen President Biden meet with Xi Jinping for the first time, very important for geopolitics. But it’s also very important for climate because these two giant emitters have to work together. Without America and China rowing in the same direction, there’s no hope of accomplishing anything on climate. And that actually has been positive. We’ve seen negotiators from the two countries at COP sit down and discuss ways of getting back in touch after a very difficult few months, and sort of animosity and lack of trust. They’re working back together. So I think at that kind of fiddly bilateral, bottom-up level, I think we’re going to see progress come out of this COP, but it’s not going to be a big announcement like the Paris accord or another agenda-setting kind of outcome.