30 Years of International Climate Negotiations: Are They Still our Best Hope?

Abstract

30 years of international climate talks have not prevented the globe from heating up more than 1 degree Celsius over post-industrial times, nor have they kept the year 2022 from breaking new temperature and extreme weather records around the world. Although the international process has been indispensable for building the foundation to move out of the carbon age, it is now time to shift attention away from the acrimonious climate talks and treat them as a sideshow, rather than the solution to the problem. An analysis of 30 years of international climate negotiations shows that multilateral climate diplomacy years ago stopped driving countries’ action. National political opportunity structures, normative shifts, economic factors, and external events are what shape countries’ climate policies largely independent of international climate negotiations.

Introduction

The objective of this article is to assess 30 years of climate negotiations before the background of larger geopolitical, economic, normative, and technological trends. The first part will provide a historic overview of climate negotiations and then analyze the outcomes of the 26^th and 27^th Conferences of the Parties to the UN Framework Convention on Climate Change (UNFCCC) held in Glasgow, UK in November 2021 (COP26) and in Sharm-El-Sheik, Egypt in November 2022 (COP27). The second part of the article will assess the evolution of the climate discourse and consider policy and technological trends over time. The third section will briefly assess the relative role the United States, China, and the European Union are playing in global emissions reduction efforts. The main argument is that the heyday of international cooperation on climate change is over. The momentum has shifted from international negotiations to national and subnational actors, and increasingly from government to societal and private sector actors.

International relations scholars have mostly considered the climate crisis a collective action/free rider problem which pits the historic responsibility of rich countries against the growing contributions of emerging economies, with the United States and China the key players (Stern, 2007; Aldy & Stavins, 2009; Victor, 2001). Climate negotiations are seen as a zero-sum game in which only the distribution of costs for emissions reductions among countries matters. This thinking may explain why climate negotiations have become more acrimonious and a comprehensive legally binding agreement looks increasingly impossible to reach. A positivist structural analysis, however, hides the hegemonic role the United States has played—deeply grounded in U.S. domestic politics—in obstructing an effective climate regime (Oreskes 2010; Clémençon, 2008, 2010; Skocpol, 2013).

There is little evidence that international negotiations have much influence on what countries actually do domestically (Aklin & Mildenberger, 2020). The last couple of years in particular have seen important climate policy relevant events unfold that have no direct connection with the dynamics of international climate negotiations. More attention is needed to understand how moral frames motivate domestic level policies and how they interact with what happens on the international level (Cashore & Bernstein, 2022). Perceived cost-benefit considerations have changed as countries face the economic and human costs of the climate crisis and the generational dimension comes into sharp focus. Domestic energy and climate policy decisions in many countries are increasingly influenced by a mix of economic and ethical climate justice considerations that recognize the intergenerational trade-offs and the tremendous inequities between main polluters and those suffering the consequences (Timmons & Parks, 2009; Sinden, 2010; Newell et al., 2021). Some research furthermore suggests that support for climate policies may be larger than assumed by policymakers (Poushter et al., 2022; Sparkman et al., 2022).

The following section of this introduction first reviews the state of the climate crisis and then briefly describes the factors that may make 2022 a turning point in the fight against greenhouse gas emissions.

The Unfolding Climate Crisis

Global heating continued its relentless trajectory in 2022. The most recent eight years, 2015 to 2022, were also the eight warmest years on record. The World Meteorological Organization put the global mean temperature in 2021 at 1.11 ± 0.13°C above the 1850–1900 average (WMO, 2022). The global average however hides great regional differences.

Extreme weather events continued their record-setting devastation in 2022. Heat waves hit Western Europe, North America, and Asia fueling disastrous wildfires in Spain and France and setting new national temperature records in many countries. Both the Arctic and Antarctica saw extreme temperatures far above normal and accelerated ice loss. In late August 2022, large parts of China first sweltered under another record heat wave followed later by torrential rains. Heavy monsoon rains flooded 1/3 of Pakistan and cost more than 1100 people their lives and millions their homes. In October, Hurricane Ian in Florida caused the most expensive flooding in U.S. history. The year 2023 started with devastating flooding in California and record January temperatures in Europe. Meanwhile global CO2 emissions reached their highest level yet, recovering quickly from a dip during the COVID pandemic.

A UN Report released in October 2022 found that there is “no credible pathway” to keep warming below 1.5°C, the threshold scientists say humanity should not breach and the objective agreed on in the Paris Accord (UNEP, 2022b). Current policies imply a temperature rise on the order of 2.8°C. The only positive news is that the world was further off course before the Paris conference in 2015, when estimates of future warming ranged up to 3.5° C (UNFCCC, 2021b). The concentration of CO2 in the atmosphere reached 417 ppm in 2022, 51% above pre-industrial levels while global carbon dioxide emissions from fossil fuels and cement hit a new record high of 36.6 gigatons of CO2 (GtCO2) (Friedlingstein et al., 2022).

Will the Year 2022 be a Turning Point?

With the background of the unfolding climate crisis, international climate negotiations are extremely frustrating to follow for anyone concerned with the future of the planet. The follow-up process to the Paris climate accord of 2015 is bogged down in acrimonious geopolitical power politics concerning allocation of blame for historic contributions, for continued reliance on fossil fuel expansion, and for failure to honor financial commitments. The new icon of the youth movement, Greta Thunberg, called the COP26 a “blahblahblah” club and skipped “greenwashing” COP27 (Dickie, 2022). On the surface, this assessment is hard to refute.

The last two Conferences of the Parties to the UN Climate Convention in 2021 and 2022 came after the COVID pandemic and had the task of reviewing success towards reaching the Paris goal and strengthening national commitments. They fell far short in adopting strengthened commitments to address the critical period between now and 2030 necessary to keep a 1.5°C warming ceiling possible. COP27 in Sharm-El-Sheik in November 2022 managed a historic, if for now only symbolic, victory for climate justice advocates by establishing a loss and damage fund.

International climate negotiations must be seen before the background of broader geopolitical and global trends and national political turning points. Multilateralism was already facing serious challenges before Russia invaded Ukraine on Feb. 24, 2022 (Nye, 2017; Kornprobst & Paul, 2021; Low, 2022). The world has faced increasing trade conflicts, rise of populist nationalism, a decline in liberal democracies, and a hardening of authoritarianism in many parts of the world. The declining trust in multilateral solutions leaves unilateral leadership to fight climate change as the only hope. A number of unrelated political events and election outcomes in key countries suggest that a turning point may be here.

Several recent elections in key countries have brought critical political shifts. In the United States, Democrat Joe Biden was elected President in Nov. 3, 2020. In August 2022, the U.S. Congress passed a bill that provides $370 billion of climate relevant financing, mostly tax credits and subsidies (Paris et al., 2022). It is a historic first, after similar efforts in 1992 and 2009 to pass energy and climate bills failed. The Inflation Reduction Act by itself puts the United States on track to achieve significant emissions reductions over the coming decade, even if it is only a start towards what is needed.

In Germany, a center-left coalition government led by Social Democrat Olof Scholz as the new Chancellor came into power in 2021, with critical help from the Green Party and the Free Democrats. The new coalition ended 16 years of center-right government under Chancellor Angela Merkel. Although dedicated to the fight against climate change, Merkel for long had been accused of being too slow and timid on climate policy (Töller, A., 2022). The new German government immediately set out to push through more ambitious climate and energy policies, even before the Russian invasion of Ukraine brought on a national energy security crisis. The Green Party now holds critical climate-policy relevant ministries. The economics and climate ministries in the largest economy in the European Union and the fourth largest in the world were merged into one super ministry under Green Party leader Robert Habeck. His Party colleague Annalena Baerbock was named Foreign Minister and has assumed a strong presence as an outspoken supporter of Ukraine and of a drastic reduction in dependence on Russian oil and gas. At the latest climate conference in November 2022, she led Germany and the European Union in calling for strong emission reduction commitments by 2030. The German pivot on energy and climate under the new government is historic with implications far beyond the German economy and the European Union (Bauchmüller & Braun, 2022).

Australia, which has suffered a string of extreme droughts and flooding events in recent years, also saw a fundamental political change after the election in May of 2022. The labor party managed to oust conservative Scott Morrison and the new Prime Minister Anthony Albanese committed Australia to a 43% cut of emissions over 2005 levels by 2030 and net-zero emissions by 2050 (Cleary & Fumei, 2022). Climate change was a significant factor bringing out the youth vote against Morrison.

In Brazil, in October 2022, former president Lula Da Silva won the election against Jair Bolsonaro, a far-right climate denier under whose watch deforestation in the Amazon reached new heights in recent years. Da Silva has pledged to reverse the destructive Amazon development and joined Indonesia and the Democratic Republic of Congo (DRC) in a club of tropical countries pledging to halt deforestation and permanently protect large swath of their forests (Reuters, 2022).

Perhaps the most important ideological shift concerns the role that trade rules should play in support of countries’ journey to zero emissions. The trade conflict between the United States and China supercharged by former President Donald Trump and a general rethinking of international supply chains for national security reasons has normalized if not legitimized unilateral trade measures. There are good reasons to be careful about tinkering with an already fragile trade system (Jackson, 2008; Low, 2022). But international competitiveness pressures have long been a strong disincentive for domestic carbon taxes and other environmental product standards and it is long overdue that climate objectives are given serious consideration in trade rules (Clémençon, 1995; Charnovitz, 2020; Leonelli, 2022).

In recent months, the United States and Europe have proposed or introduced subsidies, tariffs, and other policies aimed at speeding up the green energy transition (Banker, 2023; Swanson, 2023). Climate relevant tax credits and subsidies contained in the US Inflation Reduction Act, however, run counter to trade rules as they favor domestic producers of electric cars only. In December 2022, the European Union introduced an unprecedented carbon tax on imports from foreign companies that do not meet climate-protection standards that EU companies have to comply with (Associated Press, 2022). The tax is expected to become effective in October 2023 and be fully implemented by 2027. Only countries with the same climate ambition as the EU would be able to export to the European Union without being hit by the tax. The new rules are designed to ensure that the EU climate efforts are not undermined by production being relocated from the European Union to countries with less ambitious policies.

Climate litigation furthermore has become a major factor holding polluters accountable. Courts have increasingly sided with climate justice advocates making the claim that those primarily culpable for the climate crisis are endangering present and future human rights (Abate, 2016; Ekardt, 2022). They have forced real changes in policies, investment decisions, and already prevented a string of new fossil fuel projects from going forward around the world (Mishra, 2022). In a landmark ruling, in 2021, a Dutch court ordered Shell to cut its carbon emissions by 45% by 2030. A number of high stakes climate litigation cases will be decided in 2023 (Kaminski, 2023).

A rare multilateral success was the adoption of a historic agreement to protect global biodiversity, in December of 2022. The agreement negotiated in the framework of the Convention on Biodiversity calls for protecting 30% of the Earth and restoring 30% of degraded lands in exchange for $30 billion of funding for conservation by 2030 (IISD, 2022a; Greenfield, 2022). The agreement defines the role of Nature-based Solutions (NbS) and highlights the synergetic relationship between the climate crisis and global protection of critical ecosystems that serve both as carbon sinks and climate regulator (Dinerstein et al., 2019).

Finally, the Russian invasion of Ukraine has fundamentally changed nations’ perception of energy security and supercharged existing renewable energy strategies, particularly in Europe, as the need to become much more independent of foreign fossil fuels in general has become increasingly evident. All European governments have since pushed through bills to greatly accelerate the transition to renewable energy and the EU Commission has followed suit with a new Green Deal Industrial Plan proposal to rebuild European industrial strength (EU, 2023; Economist, 2023).

These recent political events do not by themselves change anything on the global heating trajectory the world finds itself on in 2023. Most of them are reversible as political tides change. Yet, taken together they suggest that the political momentum is shifting towards more decisive national climate policies than the world has ever seen, with the two wealthiest economic blocks—the European Union and the United States—in different ways leading the way.

Climate Negotiations Over the Years

The following section will trace the evolution of the international climate regime from the adoption of the Framework Convention on Climate Change in 1992, the negotiation of the Kyoto Protocol in 1997 to the agreement on the Paris Accord in 2015. The section concludes with a brief look at the headline issues debated during the last two annual conferences, COP26 in 2021 and COP27 in 2022. These are commitments for the period from now until 2030, phase-out of fossil fuel particularly coal subsidies, agreement on a “loss and damage” funding mechanism, and how to meet long-term climate financing goals.

UNFCCC and the Kyoto Protocol

The Paris Climate Agreement has to be understood in its historic context. From the late 1980s leading up to the adoption of the United Nations Framework Convention on Climate Change (UNFCCC) the European Union, led mostly by small European nations, pushed for binding greenhouse gas (GHG) emissions reduction targets and timetables and the United States rejected such targets (Chatterjee & Finger, 1994; Leggett, 2001; Clémençon, 2010). Only after Democrat Bill Clinton became U.S. President in 1992, did the country drop its opposition to targets and timetables which—after arduous negotiations—led to the adoption of the Kyoto Protocol in 1997. The Kyoto Protocol did commit developed countries to jointly reduce greenhouse gases by at least 5% below 1990 levels in the commitment period 2008 to 2012. The European Union as a group adopted an 8%, the United States a 7%, and the host country Japan a 6% reduction target.

Developing countries were not required to accept specific emission targets based on the “common but differentiate responsibilities” (CBDR) principle agreed in the Rio 1992 Declaration (Principle 8) and the UNFCCC (Article 4). The CBDR principle stipulates that developed countries, as the historically largest greenhouse gas emitters, will take the first binding steps towards national emissions reduction before developing countries can be expected to follow suit (Agarwal & Narain, 1991; Dubash, 2009). The 1987 Montreal Protocol  on Substances That Deplete the Ozone Layer sets the precedent for this approach. It is firmly based on phase-out targets and timetables and a differentiation between the responsibility of developed and developing countries (Benedick, 1991; Wettestadt, 2002). Ironically, it was the United States that provided leadership in the negotiations leading up to the Montreal Protocol to phase out ozone-depleting substance in 1987, with large European economies lagging behind.

The U.S. acceptance of the Kyoto Protocol with its targets and timetable only came after the European nations agreed to let countries use “flexibility mechanisms” to achieve their emissions reductions, as captured in the language to “jointly reduce emissions.” Flexibility mechanisms include a range of carbon offsets, ranging from crediting the CO2 absorption capacity of forests to trading emissions rights between countries. It weakened the original idea that countries should first and foremost embark on reducing their emissions at the source at home.

In 2001, the United States nevertheless stepped away from the agreement after George W. Bush became president in one of the most controversial and narrow election victories in U.S. history. Although the Kyoto Protocol eventually received enough ratifications to enter into force in 2005, previous key supporters Canada, Australia, Japan, and Russia later quit as well, following the United States lead (Clémençon, 2008; 2010). The European Union, however, continued its commitment to the Kyoto Protocol and established the mandatory EU-wide emissions trading mechanism (Skjærseth & Wettestad, 2008). Much has been written about how fraught the Kyoto Protocol was in letting China and India off the hook, legitimizing the United States stepping away from it. But the true reason was the influence the fossil fuel industry exerted on Congress (Pope & Rauber, 2004; Oreskes, 2010; Pooley, 2010; Supran & Oreskes, 2021). The U.S. failure to live up to the original promise to take the first steps to limit emissions continues to influence developing country positions to this day as interventions by many governments to the climate talks amply demonstrate (Dubash, 2019; IISD, 2021, 2022b).

The Paris Agreement: From Targets and Timetables to Nationally Determined Contributions (NDCs)

The Kyoto Protocol covered the period until 2012. Attempts by the European Union to negotiate a second Kyoto Protocol for the 2012–2020 period eventually ground to a halt at the Copenhagen COP16 in 2009 (Clémençon, 2010). The newly elected Democratic U.S. President Barak Obama did not want to go against the U.S. Congress after a new push for an energy and climate bill had just failed (Pooley, 2010). Instead, the United States tried to convince the European Union to drop its insistence on targets and timetables and support an open and flexible agreement architecture that would include all countries, most importantly China and India.

The Paris agreement reflected a realistic assessment of political opportunity structures in the United States and marked a way forward despite its significant shortcomings (Clémençon, 2016; Dimitrov et al., 2019). It defined a critical global normative marker by accepting the scientific consensus that the world must stay below 1.5°C warming over pre-industrial times to avoid catastrophic climate crisis. Effective lobbying by small island states and NGOs can be credited for this downward revision of the previous 2°C limit.

The Paris agreement is only legally binding as far as the process staked out goes. It does not contain legally binding provisions that require countries to take domestic legal action. The Agreement calls instead on countries to submit and regularly update Intended Nationally Determined Contributions (INDCs), which now are generally referred to as the NDCs. In that it establishes a continuous cycle through which countries plan and communicate their NDCs, then implement their plans, and review individual and collective progress to inform future planning and their next NDCs. The Paris negotiations in the end dropped equity and environmental justice considerations as the explicit basis for a binding multilateral approach. In return it provides a universal agreement that first of all is acceptable to the United States but also normatively binds all other countries, notably China and India. But how to build equity into the Paris follow-up remains a central issue (Kanitkar, 2019; Winkler, 2019).

The Paris Review 2021 and 2022: Incrementalism to Keep 1.5°C Alive

The COVID pandemic led to a postponement of the 5-year review of Nationally Determined Contributions (NDCs) until 2021 when the 26^th Conferences of the Parties (COP26) to the UN Framework Convention on Climate Change (UNFCCC) finally convened in Glasgow. The meeting was tasked with among other things completing the technical guidelines (often referred to as the “Paris Rulebook”) for implementing of and reporting on NDCs (IISD, 2021; e.g., WRI, 2022). COP27 took place in Sharm-El-Sheik in November 2022 to debate the adequacies of commitments and chart a way to more ambitious NDCs. The meetings continued the incremental steps forward on technical and procedural questions but failed to reach any political breakthrough on how to accelerate global emissions reductions in line with the Paris objective of remaining below 1.5°C.

Staying Below 1.5° Celsius and 2030 Targets

Unconditional Nationally Determined Contributions (NDCs) plans submitted by September 2022 would lead to a 2.6°C increase in temperatures by 2100—if fully implemented—and current policies to 2.8°C, highlighting a gap between national commitments and the efforts to enact those commitments (UNFCCC, 2022). Unconditional NDCs are not dependent on financial support, while conditional NDCs submitted by most developing countries list measures that are conditional on adequate climate financing from developed countries. They would still lead to an approximate 2.4°C warming. The estimates highlight the challenge to stay below 1.5°C and the deep cuts in emissions necessary. The question of ambition of commitments has been the focus of negotiations and press coverage but transparency, coherence, and implementability of NDCs are ultimately the critical elements (Pauw & Klein, 2020).

The language adopted by COP26 in 2021 barely keeps the possibility alive to prevent the world from heating up beyond 1.5°C. After much controversy, the adopted text recognizes “that limiting global warming to 1.5°C requires rapid, deep and sustained reductions in global greenhouse gas emissions, including reducing global carbon dioxide emissions by 45% by 2030 relative to the 2010 level and to net zero around midcentury, as well as deep reductions in other greenhouse gases (UNFCCC, 2021a).” The adopted language was a critical improvement over a draft text that had circulated a few days earlier and had called for “limiting global warming to 1.5°C by 2100.” This would have allowed for a scenario in which temperature increase would overshoot above 1.5°C as long as it is brought down to 1.5°C by the end of century, presumably by removing carbon from the atmosphere.

The Egypt conference in Nov. 2022 barely affirmed the goal of keeping global warming to 1.5°C. The big disappointment among many countries and environmental groups was the lack of strong and concrete language on ramping up efforts to reduce emissions before 2030, while studies show that the “keep 1.5°C alive” goal is slipping away. At some point during the conference a draft text seemed to have dropped the reference all together. The European Union and many most vulnerable countries blamed the oil-producing countries for this and threatened that they would walk away if there was backtracking on the language adopted in Glasgow (Kottasová, 2022).

For the first time at a COP, food production emissions became an issue, although no decisions were taken. Livestock emissions in particular account for almost 1/3 of human-caused global methane emissions, a powerful greenhouse gas (Stoll-Kleemann & O'Riordan, 2015). But efforts by NGOs to focus on human diet to move away from meat and dairy farming by adopting a “peak meat” decision did not go anywhere. Rather, COP27 focused on cows’ diets—to make their burps less gassy. Environmental organizations warn of the industrial farm lobby’s growing influence amid a sharp rise in representatives attending UN climate talks in Egypt (Lakhani, 2022). “Climate smart” food production has emerged as the new buzzword, with the industry investing billions of dollars into high-tech solutions such as robotics, AI, net zero dairy, precision farming, and drip-irrigation technologies. Critics see these efforts as mostly rebranding existing harmful farm practices.

Industrial food production with its tremendous land-use footprint, huge government subsidies and close connection to the fossil fuel industry, has emerged as the new battle line for climate activists. One might consider this a success.

Targeting Fossil Fuels Directly

Fossil fuels continue to provide over 80% of global primary energy and global energy demand continues to grow rapidly (IEA, 2021). Global CO2 emissions from fossil fuels and cement hit a new record high of 36.6bn tons of CO2 in 2022 (GtCO2) (Friedlingstein et al., 2022). Abandoning coal, the dirtiest fossil fuel, is essential to staying below 1.5°C warming. Environmental organizations and many governments have long advocated for the reduction in fossil fuel subsidies as the first step towards a long-term phase-out of fossil fuels. But government support for fossil fuels in 51 countries worldwide almost doubled to $697 billion in 2021, from $362 billion in 2020 (IEA, 2022). As energy prices rose with the rebound of the global economy combined with the energy crisis triggered by the Russian invasion of Ukraine, countries are hard-pressed to reduce subsidies that keep energy prices lower, especially in poor countries.

According to the International Energy Agency, 40% of the world’s existing 8,500 coal-fired power plants must be closed by 2030 and no new ones can be built, to stay within the 1.5°C limit (IEA, 2021). A main political battle at COP26 in 2021 was about the phase-out of coal subsidies. A proposal calling for the “phaseout of unabated coal and inefficient fossil fuel subsidies” was changed to “phase-down” during the last hour of the Conference plenary, due to opposition from China and India.

The difficulty to come up with an unambiguous call to phase out subsidies for fossil fuels and to phase out coal should come as no surprise. From a negotiating standpoint, and in view of the poor performance of rich countries on climate financing and their own long love-affair with coal, holding out on coal is one of the few bargaining chips left to developing countries. But the Glasgow COP decision is the first that mentions fossil fuels subsidies by name, and a number of countries including the United States pledged to phase out coal eventually (Depledge et al., 2022). Coal phase-out is a complicated societal project in many countries often pitting environmental justice and social and labor rights activists against each other (Kalt, 2021).

COP27 in 2022 also failed to take on fossil fuels more broadly and to call for “phase-out of inefficient fossil fuel subsidies.” China and Saudi Arabia led the opposition with the Egyptian Conference Presidency accused by the European Union and environmental groups of going out of its way to protect petro-states and the fossil fuel industries (Kottasová et al., 2022). By one account, at least 636 fossil fuel lobbyists attended COP27, many from the United Arab Emirates (UAE) who takes on the presidency of COP28 at the end of 2023 (Harvey & Michaelson, 2022). This has many observers concerned about the COP process in the coming year, while others believe that only by engaging with the oil industry can the climate crisis be fought. Policy reforms on fossil fuel subsidies and ultimately to leave unburnable fossil fuels in the ground will require a careful balance among social, political, and industrial interests, regardless of the stage of economic and institutional development (Pellegrini & Arsel, 2022; Jones & Cardinale, 2023).

On the positive side, the discussion about the end of fossil fuels has started in earnest and is not going away.

Compensation for “Loss and Damage” from Extreme Climate Events

The headline-making breakthrough at COP27 in 2022 was the agreement to establish a “loss and damage” fund to be financed by contributions from developed countries. It goes to the core of the equity and environmental justice dimension of the climate crisis (Agarwal & Narain, 1991; Timmons & Parks, 2009). Such a dedicated funding mechanism has long been sought by small island states and least developed countries who suffer disproportionally from the impacts of extreme climate events for which they have no responsibility. The catastrophic flooding in Pakistan in the summer of 2022 was dramatic testimony to the vulnerability of poor countries to the increased intensity of extreme weather events fueled by global heating.

The question of how to deal with “loss and damage” resulting from extreme weather events has been on the agenda for many years. In 2014, COP19 adopted the “Warsaw International Mechanism for Loss and Damage associated with Climate Change Impacts.” Other activities include the Santiago Network for technical assistance and the Fiji Clearinghouse for Risk Transfer, and the Glasgow Dialogue. None of these activities included any funding (Puig, 2022).

The initiative to establish a dedicated “loss and damage” fund separate from other climate financing gained traction when the European Union decided to go along with the idea in principle and the United States in the end gave up its opposition under strong pressure from least developed countries and civil society organizations (Plumer et al., 2022). Rich nations so far had opposed the demand fearing exposure to unlimited financial liabilities. Key questions still need to be agreed on in coming climate meetings: what loss and damage events must be considered climate-change-related, who should be eligible for compensation financing, and who should pay into the fund?

The European Union insisted that the fund would be reserved only for assisting developing countries that are particularly vulnerable to the adverse effects of climate change. The final text does not specify which countries these would be, neither does it identify who would be providing the financing, but it notes that the resources would be “new and additional” and “complement and include sources, funds, processes and initiatives under and outside the Convention and the Paris Agreement (UNFCCC, 2022).” The European Union and United States insist on broadening the donor base to include economies that still count as developing countries, South Korea, Saudi Arabia, China, and Singapore among them. China for now continues to insist on its status as a developing country.

In the final hours of COP27, negotiations came down to a trade-off between keeping the 1.5°C language adopted in Glasgow and establishing a loss and damage fund (Kottasová et al., 2022).

Long-Term Financing

Financial compensation in the context of international climate negotiations is the key to a fairer and more equitable burden sharing between countries that have very different historic responsibilities for atmospheric greenhouse gas concentrations and very different socio-economic capabilities to cope with the fall out. But countries remain far apart on the question of what constitutes “fair and equitable” in the context of a global social contract that could govern the distribution of the remaining carbon budget to stay below 1.5°C (UNEP, 2022a). Many donor countries furthermore have serious problems coming up with even the amounts that their governments have pledged.

The Copenhagen climate conference in 2009 (COP16) failed to agree on a pathway to a second Kyoto Protocol implementation period 2012–2020 to be negotiated by 2012, but it did specify that US$100 billion of climate financing from both public and private sources should be made available annually for both mitigation and adaptation by 2020 (Clémençon, 2010). How much would come from public and how much from private sources was left open. The OECD shows that $83.3 billion was mobilized for climate action in developing countries in 2020, still short of the original target but better than previous years (OECD, 2022). But questions raised in earlier years remain, related to double-counting by governments, a dropping share of government grant financing over commercial private sector flows and non-transparent reporting by the private sector using inconsistent criteria to identify what should be considered “climate financing” (Westphal et al., 2015; Bhattacharya & Calland, 2020). Climate financing furthermore benefited mainly Asia and middle-income countries, leaving out energy-poor African countries, where the energy need and the emissions reduction potential is huge (Michaelowa et al., 2021).

Climate justice advocates have long highlighted how developed countries have fallen far short in financial compensation, given that the world’s wealthiest 1% produce double the combined carbon emissions of the poorest 50% (Newell, 2022). The wealthiest 5% alone—the so-called “polluter elite”—contributed 37% of emissions growth between 1990 and 2015. Although fewer than 4% of global carbon emissions come from Africa, the continent has experienced some of the harshest impacts of climate change, with increases in temperature faster than usual.

Financing was at the center of climate negotiations from the start. The Global Environment Facility (GEF) was launched in 1991 as the first financing mechanism to provide financing in support of implementing the UNFCCC (Clémençon, 2006; 2020). But the GEF covers other global environmental conventions, biodiversity among them, and climate financing over the years has amounted to a tiny $300-500 million annually serving all developing countries. In 2014, a dedicated Green Climate Fund (GCF) was set up, meeting a long-time demand by developing countries that had long been critical of the donor-dominated and underfunded GEF. The Green Climate Fund today has financial commitments of $11.4 billion for the 2024–2027 period (GCF, 2023).

Climate financing has three components: funding for mitigation, adaptation, and for loss and damage. Most climate financing made available through multilateral channels so far has been for mitigation, that is, targets reduction or avoidance of greenhouse gases. For developing countries and least developed and small island states in particular, however, adaptation to a warming world is an existential priority. A small adaptation fund was created in 2010, and multilateral banks including the GEF promised to promote projects designed to make countries more climate resilient. But the vast majority of financing that is tracked flows toward activities for mitigation; adaptation represented only 0.1% of private flows (CPI, 2019).

Africa is projected to double its population by 2050 while 40% of the current population is still not connected to the electrical grid. Safe and clean energy is critical for development and improving standard of living. Providing this energy carbon free would have huge payoffs for climate mitigation but will require far more investments than are currently available (United Nations, 2022). At a pre-COP27 media briefing in Kigali, Rwanda in October 2022, climate activists were demanding climate financing commitments to Africa from the West of US$1.3 trillion (Gichuku, 2022).

In 2022, the World Bank Group delivered $31.7 billion to help countries address climate change (World Bank, 2022a). The World Bank, led by climate skeptic David Malpass appointed by Donald Trump, has come under severe criticism for not doing nearly enough to prioritize climate change response (Hess, 2021). Malpass has since stepped down, opening the possibility for a much more proactive role of the Bank to respond to huge opportunities to replace coal capacity with solar and wind (Harvey, 2023; Michaelowa et al., 2021).

A strategy to greatly expand the capacity of the World Bank is being discussed among key donor countries. Part of such a strategy will target the private sector in which governments have put their trust to deliver on their climate financing promise of $100 billion a year. The private sector, however, has a bad track record of investing in climate action while advertising their voluntary corporate social responsibility and sustainability strategies (Clémençon, 2021). Industry’s motivation may finally be growing. One sign is the UN-convened Net Zero Asset Owner Alliance (NZAOA)— a member-led initiative of institutional investors who are committed to transitioning their investment portfolios to net-zero GHG emissions by 2050 (UNEP, 2022b). This includes climate risks assessment in decision making and a reassessment of the financial liability of stranded assets in fossil fuels, oil, gas, and coal reserves that will be unburnable without expensive carbon capture technology if the world is serious about 1.5°C.

The work on how to secure long-term global climate investments of four trillion a year continues with little sign of significant scaling up possible anytime soon (IEA, 2021). The obvious solution—some sort of international carbon tax levied at the source of production or consumption—has been in plain sight for decades now but continues to have little chance of finding the support needed (e.g., Selrod, 1995; Clémençon, 2000).

How Things Have Changed Over 30 Years of Multilateral Climate Talks

At the time when nations signed the Framework Convention on Climate Change in 1992, the world had five billion inhabitants but 35% of people lived in extreme poverty. In 2022, the world population reached eight billion, but the poverty rate had been reduced to under 10% (World Bank, 2022a; 2022b). More people today live better and longer lives with better economic and educational opportunities for woman and children than ever before. The great decarbonization project is about continuing to build a better world for all while moving out of fossil fuels.

A number of factors and trends influencing the chances to meet the challenge are changing in ways that may finally make this possible and will be discussed in more detail below: climate science is settled and climate denialism has waned, the climate justice youth movement has gained significant influence changing election outcomes in major countries, the fossil fuel industry is under growing pressure as the main culprit for the climate crisis, as its misinformation strategies have been laid open, policymakers have lately become more supportive of direct emissions regulations after marked-based instruments like carbon taxes and emissions trading have failed to make a difference, and renewable energy technologies have finally become cost-competitive with fossil fuel energy and their deployment has grown rapidly.

The Science of Climate Change Is Settled

The Intergovernmental Panel on Climate Change (IPCC) in 2021 published its sixth Assessment Report summarizing and analyzing global research efforts (IPCC, 2021). Earth-monitoring systems have become ever more sophisticated, with real-time geo-physical information and early warning systems now available around the globe. In particular, the understanding of how global heating plays out in different regions has improved dramatically since the IPCC published its first report in 1989.

Climate denialism had its heyday in the early 2000s, but today, the basic scientific questions are settled (e.g., Oreskes, 2010). The world is warming and will continue to do so and human-caused greenhouse gases are the reason (IPCC, 2021). The call for more scientific research is increasingly recognized as a delaying tactic for action and many scientists have called for a moratorium on embarking on yet another IPCC Assessment before the political process has reacted to the current knowledge (Glavovic et al., 2021). A PEW survey conducted in 19 countries in 2022 finds climate change to be the number one threat identified by respondents in need of action, ahead of all the other problems (Poushter et al., 2022).

A Vibrant Climate Youth Movement Has Moved the Generational Dimension Front and Center

The generational and equity dimension of the climate crisis has finally come into focus, after decades as largely a theoretical side note. The individual activism in 2018 of 15-year-old Swedish school girl Greta Thunberg played no small part in this. Her climate activist group Fridays for Future has gained followers among school children around the world (FFF, 2022). Youth activism had emerged years before the Paris climate conference, led by university-based NGOs like 305.org, but it never before developed its current political influence.

At least partially with the intent of closing the generational “enthusiasm gap” candidate Joe Biden declared the climate crisis an existential threat in his successful U.S. presidential campaign against incumbent Donald Trump (Milman, 2020). In 2021, the youth vote helped catapult the German Green Party to become the third largest party in the 2021 German parliamentary elections and a key coalition partner in the Social Democratic government of SPD Chancellor Olaf Schulz.

Attribution of Responsibility for the Climate Crisis to Main Polluters

Activists supported by scientific research have been successful in changing the narrative around who is to blame for the climate crisis. In the 1990s into the early 2000s, the dominant narrative in a national context was that the climate crisis is a collective action problem for which everyone is responsible since fossil fuels provide cheap and reliable energy that we all depend on. There was an implicit understanding that consumer demand drives supply, and that fossil fuel companies simply meet the demand. This narrative served the industry very well in its strategy, now well documented, to undermine regulatory steps that would move towards a transition to renewable energy technologies. The argument that switching to renewable energy would be expensive and punish the average consumer reinforced this strategy (Cho, 2021).

More recent research however has brought to light two facts. First, greenhouse gas emissions can be attributed to a relatively small number of large companies and nations who provide fossil energy to the world (McKibben, 2012; Ekwurzel et al., 2017; Johnsson, 2018), and, secondly, transnational companies have employed deceptive tactics to undermine any shift away from fossil fuels.

Vast and deliberate disinformation campaigns have been launched to undermine scientific findings and the public’s understanding of climate change (Oreskes, 2010; Supran & Oreskes, 2021; Williams et al., 2022). Records now show that companies like Exxon Mobil had internally accepted global heating as a scientific fact and a threat to their company’s infrastructure decades ago. Oil companies have spent lavishly on political campaigns to get law makers elected who would oppose any measures to reduce CO2 emissions from fossil fuels (Mayer, 2017). In no country has this been more true than in the United States, evidenced most recently in a Congressional Hearing that produced internal industry documents showing how companies deceived the public over green claims for decades (Green et al., 2021; Milman, 2022b).

As the obstructionist role played by the fossil fuel industry became more evident, fossil fuel divestment campaigns gained traction at U.S. universities—targeting pension funds and large investors who hold fossil fuel companies in their portfolio (Hestres & Hopke, 2019). In recent years, lawsuits in the Netherlands and Germany have found BP and Shell responsible for causing the climate crisis (Ekardt, 2022).

The public has caught on to a key source of climate denialism, although such shifts have not occurred uniformly around the world. The power of the industry has remained formidable particularly in oil-producing developing countries, even if it may be waning. Until the Glasgow conference in 2021, however, calls to phase out fossil fuel subsidies had never made it into a conference decision. This is a small but perhaps significant sign of a shift in thinking.

The Limits of Market-Based Policy Instruments: Carbon Taxes, Emissions Trading, and Net-Zero Pledges

The world has lost two decades embracing the argument that carbon taxes and emissions trading could effectively replace hard government regulation in the fight against the climate crisis. This reasoning fit the neoliberal deregulation ideology that became the dominant policy approach in the 1990s spearheaded by conservative administrations under Ronald Reagan in the United States and Margaret Thatcher in the United Kingdom, and embraced to a lesser extent by other countries (Harvey, 2005).

Carbon Taxes

The environment is a public good and considered a free input by markets. Economists in the early 1990s argued that direct regulations tended to be economically inefficient and costly because it allowed industry little flexibility in how to achieve a policy objective. If the environment were given a price—through pollution fees or taxes—market participants would then find the most cost-effective way to respond (O’Riordan 1997; OECD, 1995). The private sector quickly jumped on board praising the flexibility such policy instruments would provide in principle, but after years of “studying the issue” only a few European countries ever imposed carbon taxes and all of them exempted their energy intensive export sectors (OECD, 2019; Ekins & Speck, 2000).

The anti-tax coalition soon became as obstructionist as the anti-regulatory coalition. An ambitious proposal by the European Commission for an EU-wide carbon tax in 1992 in support of climate negotiations went nowhere (Barnes & Barnes, 1999). In the United States, an energy bill that would have introduced a tax on carbon content of fossil fuels was quickly defeated in 1993 and congressional elections in 1994 brought a Republican anti-tax coalition into power.

The economic rationality argument is also grounded in the assumption that we will have the technologies to clean up the environment in the future and therefore need not take “costly” measures to reduce emissions in the present. Applying what economist call a discount rate to climate change has further promoted the delay of meaningful regulation and particularly the opposition to carbon taxes in the U.S. (Nordhaus & Boyer, 1999). Such hypothetical assumptions never had a basis in reality and proved particularly misleading on climate change (Kysar, 2010). But they were politically were influential.

The idea of carbon pricing is theoretically compelling. But history now shows that it ignored the political pushback while undermining support for regulatory emission standards. It has contributed to the extreme polarization of the climate issue and the myth that carbon taxes necessarily penalize the poor and working class (Green, 2019). In the early 2000s, it had become evident that neither direct regulation of the energy sector nor the use of carbon taxes was politically acceptable.

Emissions Trading

The discourse then moved from carbon taxes to emissions trading. Emissions trading would allow industry to reduce emissions where it is cheapest to do so. If one actor (country or company) is able to reduce its emissions beyond what it is legally required, it can sell the excess emission credits to another market participant for which reducing emissions at the source would be costlier. The circular reasoning of the self-evident benefits of carbon markets fit the neoliberal ideology perfectly (Paterson & Stripple, 2012). In order to save the Kyoto Protocol, European countries acquiesced to the U.S. demand that countries should be able to jointly implement a global objective by trading emissions credits among themselves.

In a last-minute addition, based on an initiative by Brazil, a Clean Development Mechanism (CDM) was further specified that allows developed countries to finance emissions reductions in developing countries and claim the resulting emission credits for themselves. Because developing countries did not fall under binding emissions reduction targets, the CDM did somewhat undermine the integrity of the Kyoto Protocol, but it was also seen as a way to complement climate financing from the Global Environment Facility (GEF) and help developing countries build capacity in developing carbon mitigation projects (Fuhr & Lederer, 2009; Friberg, 2009).

When the Kyoto Protocol entered into force in 2005, the European Union established its Emissions Trading Scheme (ETS) which covers more than 14,000 industries across the European Union (Skjærseth & Wettestad, 2008; Oberthür & Pallemaerts, 2010). The complexity of emissions trading can hardly be overstated. It requires a sophisticated infrastructure and methodology to measure, verify, and ultimately certify emission reductions to be able to issue tradable certified emissions reductions certificates (CERs). But it most importantly depends on a political decision to set the overall emissions cap to a level that would create clear incentives to invest in generating CO2 emission reduction credits. The price for carbon credits in the ETS soon collapsed from about $35 a ton of CO2 at launch to $6, removing any incentive for firms to invest in emissions reductions (Wettestadt 2014). Various interventions by the European Union since have started to improve the situation a bit, but carbon emission trading has proved at best to be of limited usefulness and at worst simply a Trojan horse designed to undermine stringent regulation (Markard & Rosenbloom, 2020).

Governments have increasingly complemented emission trading systems with specific regulations tied to renewable energy, emissions, and energy efficiency targets (Lindberg, 2019). The European Union has raised its renewables technology target from 32 to 45% by 2030, and Germany’s decision in 2021 to phase out coal by 2030 and reach 80% electricity production does not rely on emissions trading (Klingert, 2022). Several other European countries have even more ambitious targets. Denmark—home to the world’s largest wind turbine maker and largest offshore wind farm developer—plans for power consumption to be 100% based on renewable energy by 2027. Supply-side measures to phase out fossil fuel consumption and production also are finally gaining more political support, with both Denmark and Germany having set a firm deadline for coal phase-out by 2030 (Pellegrini & Arsel, 2022).

Many mandatory regional, national, subnational, and voluntary emissions trading systems are now operating. But rules differ, and so does the value of the resulting emission credit. At the last two COPs, much time was spent on the question to what extent various types of certified emissions reductions (CERs) acquired under the Kyoto Protocol CDM mechanism can be rolled over into post-Paris NDCs, or of what conference lingo refers to as “internationally transferred mitigation outcomes (ITMOs)” (IISD, 2022b, p. 17-18). Related is the question how to report and track various types of CERs and ITMOs through a centralized accounting and reporting platform.

Net-Zero Pledges

Before COP27 in 2022, 88 countries, covering approximately 79% of global GHG emissions, had adopted net-zero targets (UNEP, 2022a). Net-zero pledges bank on emission offsets to cancel out actual emissions which cannot be reduced and depend for the most part on emissions trading related to reforestation or forest protection projects. But the amount of land that would need to be reforested for the world to reach net zero is by some estimates an area the size of Brazil (Cho, 2021). Indigenous activists and NGOs have long argued that carbon offset schemes that transfer land use rights from the South to the North are a new form of colonial land grab and that competition for land for reforestation could push food prices up 80% by 2050 (Dabi & Sen, 2021). Net-zero pledges may also bank on yet-to-be developed cost-effective carbon capture technologies. But the credibility and feasibility of the net-zero emission pledges remains very uncertain and cannot make up for the need to target the fossil fuel industry with supply-side policies directly (McKibben, 2012; Watt, 2021; Pellegrini & Arsel, 2022).

In the run-up to the recent COPs, countries have come out with a range of pledges based on various baselines which are difficult to compare. Finland, a country blessed with huge forests and small population, is aiming to become net zero by 2035. Iceland and Austria have targets of 2040 while Germany and Sweden are aiming for 2045. But most other countries, including the United States, have goals of 2050, while countries such as China, Russia, Saudi Arabia, Brazil, and a few others have a 2060 target; India has pledged to be net zero by 2070. Only a few of the countries that have made net-zero pledges, representing 10% of global emissions and including Sweden, Denmark, France, Germany, the United Kingdom, and New Zealand, have legally binding pledges (Climate Policy Tracker, 2023).

Net-zero pledges have also been adopted by the private sector. But very few include emissions produced by their value chains. Unless there is rigorous monitoring of such private sector pledges and how they will be implemented, they cannot be taken at face value (Williams et al., 2022). The discourse very much resembles the private sector support first for the idea of carbon taxes and later emissions trading, which turned out to be mostly a delaying tactic to fend off regulation.

It is clear that countries will not be able to achieve deep decarbonization without carbon offsets. A critical task of the international process therefore is to help clarify the many issues related to emissions trading and zero emission approaches. But it cannot escape the large problem that offset opportunities are very limited unless a cost-effective carbon capture technology becomes available, which would raise new challenges for international cooperation (Maher & Symons, 2022). This will not happen anytime soon and must not be used as an argument to delay decisive real emissions reduction policies in line with deep reductions before 2030.

In conclusion, after so-called marked-based incentive approaches like carbon taxes and emissions trading have failed to deliver the promised emissions reductions, many countries are moving back to old-style regulation. They are setting legally binding overall objectives and are adopting source and supply-side specific standards to achieve these objectives. This is a long-overdue but very significant shift in the prevailing political philosophy.

The Market-Maturation of Renewable Energy Technologies

Renewable energy technologies have come a long way over the last decades to reach market competitiveness. But there are two storylines on the energy front: the first is that renewable energy installations over the last years exceeded projections substantially and the second, that the world continues to rely heavily on and invest in fossil fuels.

After a slow start over decades, hampered by low fossil fuel prices supported by lavish government subsidies worldwide, renewable energy technologies have finally reached market viability and their expansion in the last years has exceeded projections. Delivery of renewable energy projects, including wind farms and solar power projects, grew by 45% in 2020 and 2021 (IEA, 2022). Almost two-thirds of newly installed renewable power in 2021 had lower costs than the world’s cheapest coal-fired options according to the International Renewable Energy Agency (IRENA, 2022). A study for the United States finds 99% of all coal-fired power plants in the United States are more expensive to operate than renewable energy projects, all costs considered (Solomon et al., 2023). China, Europe, the United States, India, and Indonesia are now leading the demand for renewable energy technologies. In December 2022, for illustration, Vietnam agreed to a $15.5 billion climate-financing deal with leaders from G7 industrialized nations to move away from coal, which followed a recent $20 billion funding deal for Indonesia to increase clean energy and phase-out coal (Kottasová, 2022).

The Russian invasion of Ukraine in 2022 triggered an increase by over $500 billion in government spending in support of clean energy globally (Lehnis, 2022). The IEA projects that this will act as a catalyst for mobilizing private investments into clean energy of over $2 trillion annually by 2030, however still far short of the $4 trillion the IEA believes is needed for the world to reach its 2050 net zero goal (IEA, 2021). For solar and wind, average annual additions would need to be almost double its current forecast over the next five years. The weakest spot for decarbonization is heat generation in buildings. Some European countries have substantially increased their financial support for heat pumps but it will take a long time for such infrastructure investments to make much difference.

The sobering part of the energy story is that fossil fuels remain by far the dominant energy source in the world and that demand continues to increase, driven by a rapidly growing global middle class. The share of fossil fuels in the global energy mix has been stubbornly high, at around 80%, for decades (IEA, 2022). Countries are still moving ahead with “carbon bomb” projects increasingly targeted by environmental groups (LINGO, 2023). In 2022, more than $1 trillion was invested in fossil fuel infrastructure and extraction worldwide (IEA, 2022). The combined profit for the “big five” oil and gas companies amounted to $200 billion, to the great consternation of many governments and the general public (Milman, 2023). Huge political interests remain with the multi-trillion-dollar fossil fuel industry that still need to be overcome (Ekwurzel et al., 2017; Johnsson et al., 2018). How to leave large swathes of remaining fossil fuels in the ground without major disruptions to national economies will become a key question, particularly for developing countries (Newell & Simms, 2020).

Significant investment hurdles for renewable energy and necessary grid updates also remain. The belief that the green energy transition will be expensive is a sentiment that has prevailed for many decades and continues to influence investment decisions into the energy transition by companies and private citizens alike. An increasing body of research shows that this perception is mostly wrong (Way et al., 2021). Moreover, simulation models such as the IEA’s World Energy Model do not capture technological cost-improvement trends. Updating expectations to better align with historical evidence could fundamentally change the debate about climate policy in governments and accelerate progress to decarbonize energy systems around the world, promising net savings of many trillions of dollars.

The Future of International Climate Negotiations

The United States and China together account for 43% of global emissions, compared to only 11% in the European Union (Climate Policy Tracker, 2023). What these two countries do therefore matters disproportionally. Both are moving in the right direction but neither is leading in setting ambitious emissions reduction targets, and neither has committed to the sharp emissions reductions by 2030 and net-zero emissions by 2050 needed to stay below 1.5°C (Climate Policy Tracker, 2023).

The United States is a politically polarized democracy in which policies to target fossil fuels have historically met concerted resistance from special interests and the politicians dependent on them for their election financing. China is an illiberal one-party state, which for now is continuing to expand its fossil fuel use, insisting on its status as a developing country. Both countries are fundamentally locked into blaming each other for not doing enough, yet both are taking important steps domestically to reduce their emissions. It is difficult to see how their fundamental disagreement about their respective global responsibility for past and present emissions trajectories can be overcome to open the door to a future binding climate agreement. Other critically important emerging economies, particularly India and Brazil, generally side with China - as do most other developing countries - on the key issues of historic responsibility and climate financing, even if this may be changing slowly, as China’s carbon footprint keeps growing.

The United States

The United States carries the largest responsibility for historical CO2 emissions, with about 20% of total, and continues to have one of the largest per-capita emissions of any country, three times that of the EU and twice that of heavily coal-reliant China (Carbon Brief, 2021). It has a long history of failing to assume leadership in climate politics, given the hostile and polarized domestic political background. For decades and starting with the Rio conference in 1992, the United States has played a critical role in holding up progress in climate negotiations. The evolution from the Kyoto Protocol with targets and timetables to the Paris agreement built on voluntary commitments is fundamentally grounded in the unwillingness of U.S. society as a whole to accept its historic responsibility for the build-up of greenhouse gas emissions and join the European Union in leading the decarbonization of the world economy. The United States has provided cover to many other countries, notably oil-producing states like Saudi Arabia, who have been fighting any move away from fossil fuels for decades (Legget, 2001). The Kyoto Protocol with its mandatory targets and timetable for developed countries did not fail because it was a fundamentally flawed agreement, as many American observes now want to have it. The U.S. Congress’ hostility to the Kyoto Protocol was often argued to have been because China and India were seen as the free riders. But the reason behind the talking point was always the towering influence of the domestic fossil fuel industry and the corrupting influence of the industry’s support for political campaigns combined with their disinformation strategy (Oreskes & Conway, 2010; Skocpol, 2013; Mayer, 2017).

In a historic turn, the U.S. Congress, on August 16, 2022, passed the first ever bill that provides large amounts of funding—$370 billion—to fight greenhouse gas emissions (Paris et al., 2022). The Inflation Reduction Act passed on a purely partisan vote and in a much-reduced form. It is focused on creating tax credit incentives for renewable technologies, particularly for pushing sales of domestically manufactured electric cars, and it includes support for developing carbon capture technology and expanding nuclear energy among other things. In a political concession to get the bill approved it also provides benefits to the fossil fuel industry. Because of the trade-distorting subsidies favoring American industry over foreign competition, it has set off concerns among trade partners (Blenkinsop, 2023).

President Biden deserves much credit for moving the climate agenda in the United States against all odds. But most countries and environmental activists during his visit at the COP27 in Sharm-el-Sheik were not impressed by what they consider a long overdue and insufficient response from the richest country. Instead climate activists awarded the United States the unwanted title of “colossal fossil” for its role as history’s largest ever-emitter of planet-heating gases (Milman, 2022c). It doesn’t help the U.S.’s position that soon after the Egypt COP, the U.S. Congress passed its budget for 2023 that contains only $1 billion of the $11.4 billion pledged by Biden for climate financing by 2024 (Milman, 2022a).

China

China’s emissions have grown rapidly since the early 2000s and have reached about 3 times those of the United States overall, if only about 50% of the United States in per capita terms. China has taken important steps to mitigate its emissions in recent years, as it recognizes its own large vulnerability to climate change (Finamore, 2022). For the 2015 Paris agreement, the country pledged to peak its emissions by 2030. In 2020, President Xi Jinping pledged carbon neutrality by 2060. In 2021, he pledged that China would stop building coal-fired power plants abroad (Climate Policy Tracker, 2023). But although China’s installed solar and wind energy capacity now accounts for 35–40% of the global total and growing fast, the country also continues to expand coal use. However, emissions have recently leveled off as a result of economic slow-down and the COVID lockdown (Myllyvirta, 2022). The Chinese government has responded to its economic problems with a new stimulus package that will also benefit clean-energy investment. Its impact will determine whether China’s emissions have already peaked or whether they will still rebound before peaking later this decade.

China has increasingly come under pressure not just from developed countries but from least developed countries and small island states for its refusal to support concrete global 2030 emission reduction targets in line with the 1.5°C Paris objectives. China was accused of enlisting a number of least developed African countries to oppose such language with veiled threats to withhold infrastructure funding (Kottasová et al., 2022). The debate over how aggressively China should cut the use of coal, however, has unfolded on the national level as well, between Chinese climate scientists and policy advisers who want stricter emissions limits and powerful provinces and industry groups who do not (Finamore, 2022).

The U.S.–China dialog remains the most important diplomatic pathway in the context of climate negotiations. U.S. diplomacy played a significant role in China’s agreement to agree to sign onto the Kigali Protocol in 2016 to reduce HFC, an ozone-depleting substance that falls under the Montreal Protocol but has an even more potent role as a greenhouse gas. Similarly, the Glasgow conference saw a side agreement between a number of countries brokered by the United States and the European Union on reducing methane emissions by 30% by 2030—the most powerful greenhouse gas (Depledge et al., 2022).

The European Union

The most ambitious targets for emissions reductions linked to legally binding policy measures - comparatively speaking - continue to come from European countries, where a broad societal consensus to tackle the climate crisis and a relatively supportive proportional representative political system have long existed (Oberthür & Pallemaerts, 2010; Oberthür, 2016; Clémençon, 2016). Grounded in previous fights against air pollution and acid rain, and long subject to a high dependence on foreign energy sources, they are in a better position than most other countries to push through the political steps necessary in line with a rapid decarbonization. The Ukrainian war has brought the more recalcitrant Eastern European coal-dependent countries, Poland and Hungary, more into line with the climate progressive group of Northern countries.

While the U.S.–China relationship is the key to reducing Greenhouse gases, it is the European Union (and the United Kingdom, now outside the European Union) that has historically set the pace for climate action among nations. The European Union exceeded its greenhouse gas emissions reduction target set out in the Kyoto Protocol for 2020 and has put forward a plan to further cut emissions by at least 55% by 2030 and to become the first climate-neutral continent by 2050. This became possible after Poland received financial guarantees for reducing its reliance on coal (EU Commission, 2023). A Green Deal Industrial Plan proposed by European Commission President Ursula von der Leyen in January 2023 is designed to enhance the competitiveness of Europe’s net-zero industry by simplifying regulation, speeding up access to finance, enhancing skills, and building “resilient” supply chains through new trade deals. The proposal would make €250 billion ($272 billion) available from existing EU funds for the greening of industry (Blenkinsop, 2023).

Conclusion

The climate crisis is unfolding. The world is already feeling the effects of a 1°C warming over pre-industrial times and far-ranging further changes are now inevitable, including sea level increase by 2–3 feet by 2100, and more frequent and more intense heat waves and flooding events (IPCC, 2021). It is the price for two decades of delay due to climate denialism, unfounded trust in market-based mechanisms, and shameless exploitation of policy failure by a fossil fuel industry that has made trillions of dollars in profit while millions of people around the world pay the price. Multilateral climate negotiations have failed to respond to the problem decisively and their relevance is declining.

I argue, however, that there is a silver lining to this failure. The hope now is not for a breakthrough in climate negotiations, but rather that many trends not directly linked to international climate negotiations are starting to point in the right direction. The take-away is that countries cannot wait for a comprehensive global climate accord to emerge in the coming years. It is imperative that nations with conducive socio-political and economic constellations and widespread public support build on and reinforce these positive trends independent of a stalemate on the international level. Whatever progress can be achieved on the international level will depend on their leadership and strong climate action clubs.

Multilateralism faces growing challenges across the board. There is a counterproductive element to climate negotiations as they are seen as a game to be won by major powers. Finding a middle ground between historic and current and future responsibility for the build-up in greenhouse gases in the earth’s atmosphere that can satisfy the negotiating positions of the U.S. and China and India in particular, seems highly unlikely under current conditions, especially given the intense national pressure to not be seen as caving to the adversary. The Russian invasion of Ukraine and China’s siding with Russia only adds to the difficulties of agreeing on a binding global climate accord to succeed the Paris Agreement of 2015.

However, international climate negotiations have played a crucial role in triggering the largest ever coordinated scientific cooperation effort in human history, in highlighting the normative equity dimension of the climate crisis, in building the institutional foundation at the national and subnational levels for developing action plans for mitigating emissions and adapting to climate change. They have in various ways encouraged and helped finance national level climate action, particularly in the poorest and most vulnerable developing countries, and they have indirectly encouraged renewable technology development and adoption.

I argue that the Kyoto Protocol was the high point of international climate cooperation. It is the Kyoto Protocol with its hard targets and timetable that triggered national level capacity building across the public and private sectors, perhaps most importantly with the establishment of the mandatory emissions trading system that the European Union piloted in 2005. Ironically, the adoption of flexibility measures that required a complex implementation mechanism related to measuring and verifying emissions baselines and reduction efforts engaged a broad range of government agencies, research universities, think tanks, and private sector entities, even if emissions trading has not delivered as advocated. For better or worse, such broad-based engagement would not have been necessary with direct regulation. The normative impact of the Kyoto Protocol finally reached down to the subnational and community levels and has guided climate action by states like California and New York, and inspired many cities around the world to adopt emissions reduction goals (C40 Cities, 2023; Mazmanian et al., 2020).

The Paris Accord of 2015, despite its non-binding voluntary character, is an important stepping stone. The voluntary Nationally Determined Contributions (NDCs) reflect the progress countries have made in developing broad-based, detailed climate action plans moving the national discourse forward (UNFCCC, 2023). Unfortunately, these NDCs allow only a comparison between one country’s own past pledge and its current action. Because of the different baseline and target years used in NDCs, a cross-country comparison requires a deeper analysis and shows the inadequate ambitions by many rich countries (ClimatePolicyTracker.org). Overall, current policies laid out in the NDCs imply a temperature rise on the order of 2.8°C, still far away from the 1.5°C objective the Paris Accord has adopted.

A decisive response to the climate crisis can only happen with a fundamental restructuring of the world economic system and this will require trade measures to help first mover countries maintain their ambitious climate policy targets against foreign dirty competition. Lessons from the 1990s with carbon taxes show that supply-side policy measures remain ineffective if confined to domestic markets. The challenges facing multilateralism in general provides an opening for more unabashed unilateral climate activism supported by trade measures. But with the international trade system in crisis, any revitalization of global trading rules must be revised with climate policies in mind, while also avoiding a spiraling trade war (Low, 2022; Swanson, Jan. 25, 2023). Focusing on specific energy-intensive industries may prove the best approach but political sensitivities appear large (Leonelli, 2022). Without trade rules explicitly revised to support deep global emissions cuts by 2030, it is hard to see how the Paris objective of limiting global heating to 1.5°C could still be kept alive.

New industrial policies of countries increasingly center around bringing industries closer to the renewable energy hubs with abundant wind and solar power that are often located far from today’s industrial centers (Economist, 2023). Future green competitiveness will be determined by who can and will take advantage of these opportunities, which require large investment with potentially huge payoffs. The less discussed aspect of this is that not all countries will be able to compete in a decarbonizing world economy, reinforcing existing inequities (Machin, 2019; Pellegrini & Arsel, 2022). Financing therefore remains central in support of a more equitable transition out of the carbon age.

The United States and the European Union—the two major economic blocks—have already adopted unilateral measures in support of stepped-up domestic climate policies - albeit with very different trade implications that will require better coordination with trading partners. The competition in a greening world economy will hopefully encourage other countries to follow suit in an effort to avoid loosing important foreign markets and lead to a scaling up of overall ambitions to reduce greenhouse gas emissions.

International climate negotiations will remain important as a forum for coordination of research and for sorting through the many methodological, technical, and process-related issues in support of stepped-up national efforts. Most importantly they are needed to keep the pressure on rich countries to scale up climate financing for mitigation, adaptation and loss and damage. The role that emerging carbon offset technologies can and should play will also increasingly become an issue in need of guidance and coordination. The climate crisis is an existential challenge facing all countries. All hope is not lost if those countries who are able to do so for largely domestic political reasons continue to push the right policies without regard for what happens on the international level.