In the Bavarian town of Elmau, Germany is hosting this year’s summit of the Group of Seven leading economies. The primary goal of the summit was supposed to be addressing climate change, but that changed when Russia invaded Ukraine, setting off a chain reaction of issues including food, energy, and global security.
The development of a “climate club” for nations that wish to move quickly on this subject is one of the concepts being examined by the German government, led by Chancellor Olaf Scholz, in its ongoing efforts to persuade the G-7 to commit to collective progress on reducing global warming.
William Nordhaus, a Yale economist and Nobel Prize winner, initially proposed the notion and said that the voluntary basis of current climate accords hadn’t produced enough advancement.
He suggested that nations that were serious about decreasing their emissions may band together to create a club that would collectively set aggressive goals and exclude members from trade restrictions connected to climate change that would apply to non-members.
Scholz of Germany wants to garner support for the plan from the whole G-7. Since both France and Italy are members of the European Union, which is a club with strict climate objectives, they are almost givens. Being a member of the climate club might aid Canada’s efforts to complete a long-discussed trade pact with the EU.
The UK withdrew from the EU in 2020 and is hesitant to sign any agreement with the group. But London would probably be open to joining a club with non-EU members, especially if the US joined.
Due in large part to Republican resistance, Washington has traditionally had difficulty negotiating into legally enforceable accords on climate change. President Donald Trump removed the United States from the 2015 Paris Agreement, a far less binding agreement, much as President George W. Bush withdrew America’s signature from the 1997 Kyoto treaty.
However, the US returned to Paris under President Joe Biden, and there is a growing understanding that a unilateral strategy may not be in America’s interest, particularly if it wants to compel China to contribute to carbon reductions.
The potential to exert pressure on its large neighbour and get preferential access to the European and North American markets may potentially have an impact on Japan.
China, the largest producer of greenhouse gases in the world, is unlikely to immediately join. But it might need to join if it wants to sell its goods to the rest of the globe without facing climate levies.
As it has done with the EU’s proposed “carbon border adjustment system,” which also includes taxes for polluters who don’t follow the bloc’s regulations, expect Beijing to be harshly critical of the notion.
China has made an effort to mobilise other developing nations against the proposal, including South Africa and Indonesia. That is one of the reasons Scholz welcomed both of those nations to the G-7 as guests and made it plain that anybody could join the climate club.
According to experts, a sufficient number of nations must join the club for it to become alluring enough for other nations to feel driven to apply.
It’s still unclear exactly how the club’s regulations would operate. The concept may be put on the table at subsequent meetings, notably the UN climate summit in November, with the G-7’s general support but without any official obligations. An endorsement there would demonstrate that the club is not the sole domain of wealthy countries but rather a serious contribution to current climate efforts.
Given that current initiatives aren’t producing the emissions reductions necessary to fulfil the Paris Agreement’s aim for curbing global warming, Johan Rockstrom, head of the Potsdam Institute for Climate Impact Research, believes it’s worthwhile to give it a shot.
The fundamental idea behind a climate club, according to him, would make it a race to be the quickest rather than the existing scenario where the least ambitious nations set the pace.
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