How Geopolitics Will Drive Post-COP26 Climate Action
By James Bowen
The following article is based on remarks given at a climate change dialogue hosted by India’s Council for Strategic and Defense Research on 8 December 2021.
International Climate Action
The Glasgow Climate Change Conference (COP26) can be considered a failure from the singular perspective that its commitments do not amount to the agreed goal of limiting global warming to below 2 degrees Celsius.
Yet there is justified expectation that some agreements made over the course of the summit will expand the available set of tools for accelerating emissions reduction. There is also a potentially powerful surrounding trend of meaningful climate action being tied to the pursuit of geopolitical alliances and rivalries.
Indo-Pacific in the Spotlight
International climate action is about universal responsibility. Yet, the actions of Indo-Pacific economies are particularly visible in this space.
As the world’s major centres of economic and energy demand grow, the spotlight on the Indo-Pacific countries to implement meaningful climate action will increase.“
Thus far, the only regional governments that have consistently raised global ambition on climate at this, or previous, COP negotiations are small island developing states, principally in the Pacific.
Data from Climate Action Tracker also shows that only one of the larger Indo-Pacific countries – Nepal – has made “almost sufficient” progress on the Paris Agreement’s goals.
Japan is the only country that falls into the “insufficient” category. The rest have made either “highly insufficient” or “critically insufficient” progress.
A major discursive trend surrounding COP26, with which major Indo-Pacific economies must contend was, however, a challenge to the principle that has guided regional climate change development up until now, including under the aegis of the Paris Agreement.
This is around permission for emerging economies to prolong their emissions-intensive growth as they seek developmental parity with advanced counterparts.
The underlying respect for fairness that undergirds this principle has not changed. Rather, there have been massive gains in the availability, cost and reliability of renewable energy and associated technologies, including things like green hydrogen, that can more effectively challenge the traditional strengths of fossil fuels on economic development.
There is even an emerging consensus that capitalising on new opportunities in this space, whether through greening domestic energy mixes or targeting green exports, and also related diplomatic opportunities, can be a source of increased competitiveness.
Reflecting these changes, it has become increasingly permissible to implore the world’s largest emitter, China, to set and meet more ambitious climate targets, including to potentially bring forth its net zero target to 2050 and make stronger commitments on coal reduction in particular.
China does, admittedly, continue to have deep pockets of inequality, yet it is also undoubtedly an economic superpower with the technological and resource abilities to more rapidly decarbonise an economy that accounts for about 30 per cent of global emissions.
This type of logic will also increasingly apply to India and others in South and Southeast Asia, many of whom are yet to even set net zero goals.
That’s not to say that advanced economies have been absolved of their ongoing responsibility to still be the earliest and biggest movers on decarbonisation and assist emerging economies in continuing to make the transition on financial, technical, or other fronts.
On that criterion, Australia, which is otherwise aspiring to a regional leadership role, could be seen as having a particularly poor showing in the context of COP26.
Australia brought an underdeveloped roadmap for meeting its new 2050 net zero target and refused to update its 2030 target or sign onto major pledges on coal and methane.“
It was similarly disappointing to note that levels of funding from the developed to the developing world continue to fall short of the promised $100 billion per annum, particularly as that figure was always a significant undercounting of what is actually needed.
Those are some of the admittedly large negatives of COP26.
At the same time, the lead up to event, and the note on which it ended, could be seen to uphold the intent and logic of the 2015 Paris Agreement on climate change and the admittedly imperfect realm of international cooperation on climate.
There is now in place a net zero coalition which covers most of the world’s emissions and a continuing mechanism for inviting improved commitments.
The US also came back to the table and exerted a strong influence on some proceedings.
There were some important, albeit largely symbolic, words in the final communique and surrounding pledges around reducing usage of coal, methane emissions and fossil fuel subsidies.
There were also some potentially binding outcomes, including mechanisms like the First Movers Coalition of major industrial customers, who have agreed to large purchase agreements to accelerate commercialisation of new technologies at scale.
In addition, there were some similarly interesting announcements from the likes of the Asian Development Bank and Bloomberg Philanthropies to provide emerging economies with meaningful assistance on retiring coal assets and more quickly adopting green energy.
These types of outcomes support that changing calculus mentioned above, regarding there now being viable pathways to achieve desirable levels of economic development at the same time as decarbonisation, albeit with a need for considerable external support.
The great hope is that there will be an intensifying race to the top that can more quickly, but still justly, break down some of the power structures and barriers to change which fossil fuel interests have built up over more than a century.
It seems increasingly clear that both companies and countries that move quickly and strongly in the green space can increase their competitiveness.“
These actors could simultaneously avoid costs, including the accumulation of stranded assets and exposure to future penalties such as carbon pricing and associated trade barriers.
The Climate-Geopolitics Nexus
Such incentives also support a big trend in the indirect context of COP26: the increasing synchronisation of climate change action with the pursuit of broader geopolitical alliances and rivalries.
This is obviously symptomatic of a more contested regional and global order. But it could, in coming years, offer a more results-driven complement to the universal but essentially voluntary and typically slow-moving process led by the United Nations Framework Convention on Climate Change.
A coordination of US climate action with its broader foreign policy was the express purpose of Washington appointing John Kerry as special presidential envoy for climate.
One of Kerry’s noted outcomes at COP26 was securing an agreement with China for bilateral cooperation on raising climate ambition.
But there were elsewhere strong, and likely more concrete, signs of the US essentially looking to utilise elements of its broader opposition to China in service of its climate gains.
Notably, the US and European Union pledged to work towards a framework for lowering trade barriers to their steel and aluminium production, to the detriment of less climate-friendly products entering their markets, largely from China.
Progress on this front could include potential participation of Indo-Pacific parties such as Japan.
There was elsewhere evidence that the pressure which the US placed on ally Australia ahead of COP26 at least contributed to Canberra’s raised ambition.
Australian Prime Minister Scott Morrison explicitly cited the need to protect the US security alliance as a central motivator for eventually adopting a net zero by 2050 target.
This followed Australia, the US and the UK having formed the AUKUS security and military technology pact.
This climate-geopolitical nexus could also aid in the much-needed capital transfer from developed to developing countries, including the Indo-Pacific.“
The European Union, indeed, has already signalled that increased financial assistance on renewable energy and green hydrogen development will be a key plank of its new Global Gateway response to China’s Belt and Road Initiative (BRI).
This followed China itself announcing it would no longer finance coal-fired power through the BRI, which means it too will likely seek increased green outreach.
Regional commitments from other countries and coalitions could advance these trends.
The Quad of India, Japan, Australia, and the US is likely the best-configured grouping for doing so and has already signalled its intentions in the climate cooperation space.
All four countries have already made or at least pledged significant commitments to meeting regional infrastructure and other developmental needs both in individual and collective capacities.
This has often followed making necessary changes to their institutional and philosophical approach to market intervention that would be key to responding to the climate challenge.
International competition on responding to climate may not be the ideal solution. Yet it may have increasing appeal as a means of shaping other states’ responses in ways that have thus far alluded policymakers.
There are two important caveats to note in the context of this process.
The first is the US can’t be certain to continue playing an anchoring role for Indo-Pacific- mechanisms should it experience another rapid about-face to a climate-inactive administration.
The second is that there is a pronounced need to manage some of the risks of geopolitical competition interrupting or even severing the complex international value chains that have been critical to existing progress on the energy and climate transition.
It’s difficult to overlook, for example, the role that China has played in building out and bringing down costs of technologies such as solar photovoltaic panels and wind turbines, even if this was highly dependent on industrial practices that other countries oppose.
On the potential US change of government front, there is likely no answer other than for other countries to take on more responsibility for improved regional action, as they did during the Trump administration on issues including collective security.
On the uncoupling front, there will ideally be a selective policy process that seeks to best preserve beneficial economic interactions while simultaneously onshoring components of clean energy value chains, which would also enjoy significant domestic political appeal.