Lessons From the World’s Most Successful Climate Change Agreement
Saving the planet from climate change is increasingly dependent on cooperation among countries with contentious relations
As President Biden’s Special Presidential Envoy for Climate, John Kerry has been visiting foreign nations at a furious pace, most recently China. His mission: to save the planet from increasingly imminent climate disaster through coordinated global action on a massive scale. US climate policy to date has been limited and now is largely dependent on the proposed $3.5 trillion infrastructure package. However, avoiding climate disaster is only possible if ambitious actions are also taken by other nations with whom the US has limited influence.
While the United States is by far the largest source of cumulative greenhouse gas emissions, China is a much larger source of current emissions — over a quarter of the world’s total and more than all the developing countries combined. The US emits less than half as much, 11 percent of the global total. India and the EU are next, both about 6.5 percent. Just ten countries account for more than 2/3 of emissions, a group including Russia, Brazil, Indonesia, and Iran as well as Japan and Canada. Thus, any effective solution to climate change will require collective action by countries with disputatious international relations.
Recent actions by four of the largest contributors to climate change — China, India, Russia, and Brazil — illustrate the challenges Ambassador Kerry must overcome to achieve the greenhouse gas reductions required on a global scale.
· China leads the world in its commitment to renewable energy and has adopted long-term climate policy goals as discussed below. However, the Asia giant is the only major economy that increased GHG emissions last year. China currently plans to build dozens of new coal-fired power plants and blast furnaces, adding about 1.5 percent to its current annual emissions. Two Chinese banks increased their fossil fuel lending more than any others since 2016 and the signing of the Paris Agreement.
· Russia is the world’s largest methane emitter, a greenhouse gas with 86 times the warming impact of CO2 measured over a 20-year period and primarily released by leakage and venting from wells and pipelines. Thanks to its large land area, Russia has enormous potential for developing solar and wind energy — but has done almost nothing to develop it.
· India remains dependent on coal, much of it low grade and highly polluting, for about 70 percent of its electricity. While renewable energy in the country is growing rapidly from a small base, many new coal plants are under construction or planned but largely stalled due to an inability to obtain financing. With rising incomes, a major challenge is an extraordinary increase in room air conditioner sales, projected to grow 16 percent annually in the country over the next decade. The resultant increase in demand for electricity will add substantially to carbon emissions and contribute to still hotter temperatures.
· Brazil’s president, Jair Bolsonaro, has been called “the world’s most dangerous climate denier.” Deforestation in Brazil’s Amazon, a sink for absorbing CO2, of global import, hit an 11-year high in 2019 and soared a further 25 percent in the first half of 2020. Thanks to hotter temperatures and droughts, the southeastern Amazon has already been transformed from a carbon sink to a source of CO2 emissions.
A further indication of the challenge facing Ambassador Kerry, each of the four countries has yet to respond adequately to climate change despite recent weather-related natural disasters linked to climate change. This year intense rainfall in central China killed more than 300, left subway riders in the city of Zhengzhou in waters up to their neck for hours, and displaced 1.5 million. Russia is warming 2.5 times faster than the rest of the world. In 2020, regions across Russia experienced the hottest temperatures on record, contributing to forest fires that burned through acreage the size of Greece and releasing enormous amounts of CO2 into the atmosphere.
The economic costs of climate impacts in India are already immense. In 2020, Cyclone Amphan, affected 13 million people and caused over $13 billion in damage. Continued warming could increase India’s national poverty rate by 3.5 percent by 2040, reversing recent development gains for millions.
In Brazil, climate change threatens the reliability of the nation’s hydropower, the primary source of power, and has led to water shortages. From an economic perspective, such key Brazilian commodities as coffee and beef are at high risk from drought and extreme temperatures.
Beyond appeals to national self-interest — so far seemingly of limited impact — what strategies can Ambassador Kerry call upon to promote an effective response to climate change? Four measures, each consistent with short-term economic interest, offer some promise:
1. To create an economic incentive for strong climate mitigation measures, a tax on carbon-intensive imports should be applied to level the playing field for domestic manufacturers of energy-intensive products like aluminum and steel. Legislation to create such a mechanism was introduced by Senator Chris Coons and Representative Scott Peters in July 2021 and may be attached to the $3.5 trillion infrastructure package. A similar policy proposed in the EU could cost Russian exporters an estimated $45 billion per year, over 10 percent of the country’s national export revenues.
2. Financial pressure for strong climate policies should also be applied through greater use of banking regulation. The Federal Reserve and Treasury Department need to increase pressure for greater transparency and disclosure of climate risk, both domestically and internationally. International cooperation among banking regulators is increasing through the Network for Greening the Financial System — an organization that includes the Central Bank of Brazil. Brazil was the fourth largest destination for global Foreign Direct Investment (FDI) flows in 2019, much of it from the United States, a potential source of influence. A similar focus on climate risks to insurers is emerging that will also increase costs for projects vulnerable to extreme weather events.
3. A less direct but still influential strategy for the US is to increase financial support for the hundred-plus countries which contribute almost nothing to global greenhouse gas emissions. Almost all are highly vulnerable to extreme weather events. This would enhance the US image and influence in the climate negotiations. Pre-Trump, such contributions by the US amounted to less than $3 billion a year. Increasing this to $10 billion per year would represent a tiny fraction of planned US climate spending, buy considerable goodwill with developing nations, and respond to major criticisms from India, South Africa, and other poor countries.
4. As a longer-term strategy, the US should increase support for technological innovation such as more efficient air conditioners and lower-cost, better-performing batteries, products that would reduce GHG emissions while also improving the reliability of the power grid. As these technologies become demonstrably lower cost than fossil fuels, the rationale for building and operating fossil fuel plants will rapidly diminish in other countries as well as in the US.
While the political environment for climate cooperation remains difficult, to say the least, there are some reasons for hope. This year both China and India have or will soon ratify the Kigali Amendment, an international agreement to phase down use of HFCs, a potent greenhouse gas widely used in refrigeration and air conditioning. In September 2020, President Xi Jinping announced that China will peak emissions before 2030 and aim to achieve carbon neutrality before 2060 — positive steps, if inadequate. At the April climate summit convened by the US, President Putin spoke to the need for reducing methane emissions, another potent greenhouse gas, although without any specific policy proposals. Of the four countries, only Brazil currently seems completely devoid of any meaningful commitment to climate action.
An indication of how difficult it will be to achieve climate cooperation was evident during Ambassador Kerry’s just concluded visit to China. In response to efforts to find common ground in advance of the forthcoming international climate meetings in Glasgow, China pushed the US to lift sanctions on imports of solar panels as a quid-pro-quo for greater cooperation. While the solar panels help reduce carbon emissions, in June the US banned imports of Chinese panels believed to be products of forced labor. This is only one of the many conflicts Ambassador Kerry will have to navigate in his mission to save the planet.
Alan Miller is a former climate change officer in the International Finance Corporation (2003–13) and climate change team leader, Global Environment Facility (1997–2003)