A climate club with carbon pricing? What this means for US
Germany hopes to leave its mark on the Group of Seven presidency by putting the group of wealthy nations at the center of a club dedicated to fighting climate change.
There is only one catch. The countries affected have different ideas on how to deal with rising temperatures.
Take carbon pricing. One of the goals of the so-called climate club is to develop standards for pricing carbon emissions, according to a G-7 program published by Germany last week.
But the United States does not have a national carbon market, and CO2 pricing is hotly contested on Capitol Hill. Nor is it part of President Biden’s broad climate agenda.
The idea of aligning a coalition of countries with high ambition on climate change is a good one, said John Podesta, adviser to former President Obama and founder of the Center for American Progress.
“But if you set benchmarks that don’t measure what countries are actually doing to implement ambitious goals…I think we’re going to miss something,” he said in a call with reporters this week. week.
What matters is whether or not the United States meets its emission reduction commitments, not the policies that are used to do so, Podesta added.
The same goes for a European proposal to impose carbon tariffs on goods imported from countries with less ambitious climate policies than its own – a so-called carbon border adjustment.
“I think the US administration has recognized that combining investment and standards is a way forward to achieve the kind of goals that the EU and Germany are also trying to set and achieve” , said Podesta.
The idea of climate clubs has been around for years, but its profile is rising as Germany uses the G-7 presidency to promote its adoption. The exclusivity conveyed by these clubs has upset some countries that would not be included (Climatewire, January 10).
Dino Patti Djalal, former Indonesian ambassador to the United States, warned at a recent press conference against the creation of a “rich country club”.
By definition, a club indicates a certain level of exclusivity. But Germany’s plan calls for a coalition “open to all countries” and expands international partnerships beyond the G-7.
“In addressing technology transfer and climate finance, we hope to bring developing and emerging economies on board,” German Chancellor Olaf Scholz said in a speech at the World Economic Forum.
This could make it more of an alliance of like-minded countries.
“Opening it up to developing and emerging economies will alleviate any legitimacy issues; for example, that it could be a “rich country” club, wrote Robert Falkner, research director of the Grantham Research Institute on Climate Change at the London School of Economics, in an email. “But if it’s not exclusive, then it’s not a club.”
The advantage of bringing countries together is that it can put pressure on countries outside the grouping to act more aggressively against climate change, said Frauke Röser, founding partner of the Germany-based NewClimate Institute.
Finding an agreement on carbon pricing would be difficult, she noted. But a climate club doesn’t have to deal exclusively with CO2 pricing.
Germany did not specify how countries could join the “club”, except to stress the importance of carbon pricing, a commitment to the Paris climate agreement and compliance with global trade rules. Germany is hosting a conference later this week to gather ideas for shaping its climate and energy agenda.
Boosting financing for developing countries and their transition to clean energy is one of the issues the G-7 must address this year. The group will also push its members to honor their promises to no longer finance coal projects internationally.
Climate activists want G-7 countries to end domestic coal use by 2030. This is something Japan, in particular, is not ready to do, said Maria Pastukhova, Policy Advisor in Energy Diplomacy at E3G.
Japan is the only G-7 country – which also includes Canada, France, Italy, the United Kingdom and the United States – that did not join the pledge to move last year. public funding from fossil fuels to clean energy (Climatewire, November 4, 2021).
It will be up to Germany to maintain diplomatic pressure to achieve these goals, Pastukhova said. It could have some leverage with Japan given the countries’ longstanding cooperation on developing low-carbon technologies.
Whatever happens, the climate club cannot be considered anti-China or anti-developing world, she said. “That would not be productive in bridging the gap between North and South.”