Global climate policy produces many big ideas that end up failing because of minor issues. This could also be the fate of the “Bridgetown Initiative” of the Prime Minister of Barbados, Mia Mottley, to use special drawing rights to finance global climate action. The Deutsche Bundesbank is not playing along, and the ECB is also skeptical, as Bernhard Pötter found out. But without a green light from the central banks, it will be difficult.
Even the climate club initiative of German Chancellor Olaf Scholz started with a lot of verve but now struggles to find supporters. The approval from potential partner countries is limited, and the criteria have been relaxed. Lukas Hermwille of the German Wuppertal Institute describes how the climate club would have to be further developed to guarantee companies more security for the green transformation.
On the other hand, the plans of the Federal Ministry of Economics and Technology for liquefied natural gas far exceed actual demand. This is also revealed by an internal report from the ministry itself, which Malte Kreutzfeld was able to access. One first plan for an LNG terminal in Hamburg is to be scrapped. If all planned LNG terminals are built, there is the risk of either massive misinvestment or more gas imports than are compatible with the climate targets.
A great deal of hope for international climate finance is placed in special drawing rights – but Germany and presumably other euro countries will not pass on their special drawing rights at the International Monetary Fund to poorer countries. The German Bundesbank (Federal Bank) and the German Federal Ministry of Finance fundamentally oppose such a transfer. And the European Central Bank (ECB) is also highly skeptical about the instrument. This is the result of a Climate.Table inquiry submitted to these institutions.
The Bundesbank, which owns and manages Germany’s SDRs, said in a written response that it “cannot transfer SDRs to the World Bank, other countries, or multilateral development banks.” This is because “development and climate policy are government responsibilities. In this respect, the provision of funds by the Bundesbank – be it in the form of loans or gifts – to the World Bank for these purposes is not possible.”
The European Central Bank (ECB) also confirmed this position upon inquiry: “Making special drawing rights available from eurozone national banks to multilateral development banks or individual countries would not be compatible with the requirements of the ECB Treaty as it would violate the prohibition on monetary financing.” Thus, the prohibition on direct transfers applies not only to the Bundesbank, but to all central banks in the eurozone. The ECB sees its obligation to contribute to climate action, but “within the framework of our mandate,” it said. “Government and parliaments are in the leading position in this regard.”
However, many hopes rest on the idea of using SDR monetary creation to meet the huge investment needs of international climate change mitigation. SDRs are “reserve currencies” that all member countries of the International Monetary Fund (IMF) can use to create financial liquidity and avoid potential crises in the financial system. Their funds are offered at low-interest rates that allow poor countries to finance projects at significantly better terms than on the market.
During COP27, the idea of SDRs as a way for new and innovative ways of climate finance was broadly and favorably discussed. It is part of the so-called “Bridgetown Initiative” with which Prime Minister of Barbados Mia Mottley campaigns for a reform of the global financial system. The agenda is based, among other things, on the proposal that industrialized countries should use their SDRs at the IMF to provide other countries and institutions with cheap money for climate action.
According to a study by a panel of experts, around one trillion dollars a year will be necessary to achieve the Paris climate targets by 2030. This money is to flow into investments in renewables, adaptation and compensation for climate damage. But so far, the industrialized countries have not even managed to mobilize the promised 100 billion dollars every year after 2020.
The idea to use SDRs for climate action was inspired by the IMF’s actions during the Covid crisis: In the summer of 2021, the IMF created a Resilience and Sustainability Trust (RST), to which countries contributed a total of 650 billion US dollars via their SDRs. The argument at the time was that if the countries ran into financial trouble due to the Covid costs, it would also pose a serious threat to the global financial system.
Climate activists around Mia Mottley now make a similar argument. And the head of the UN Development Program Achim Steiner also warned Climate.Table of a massive debt crisis in poor countries caused by the effects of climate change (Climate.Table reported).
A fund solution akin to the RSF would then also be conceivable for climate financing, the ECB stated. “Such contributions have to be decided by IMF members. Eurozone central banks can participate in IMF funds and initiatives with their SDRs as long as their positions therefrom are in SDRs,” an ECB spokesperson said.
This is why the IMF designed its RSF in such a way that allows member countries to use their special drawing rights – and still not jeopardize them as currency reserves. France and Italy have also made use of this option.
However, the Germans put a stop to that, too: The money for such a fund cannot be generated from SDRs, at least not from Germany, according to the Federal Ministry of Finance. That would only be possible via budgetary funds from the parliament. “Germany generally cannot participate in the on-lending of SDRs to trust funds of the IMF or development banks (SDR channeling), as SDRs are part of the foreign exchange reserves of the independent Bundesbank, which decides on them and rejects on-lending for legal and regulatory reasons,” a spokesman for the Federal Ministry of Finance replied to a Climate.Table inquiry.
The German government makes “substantial contributions to both the Resilience and Sustainability Trust (RST) and the IMF’s Poverty Reduction and Growth Trust (PRGT) from budgetary resources.” On the RST, it states, “Germany supports this trust with a loan contribution of 6.3 billion euros from budgetary resources” – a traditional and entirely different structure than favored by the supporters of the “Bridgetown Agenda.”
The German Federal Ministry for Economic Affairs and Climate Action (BMWK) expects significant overcapacity regarding the planning and construction of LNG terminals on the German North Sea and Baltic Sea coasts. According to a confidential preparatory paper for a meeting this week at the Chancellor’s Office, the ministry puts the capacity of the ten planned floating terminals due to come on stream this winter and next at 53 to 68 billion cubic meters of gas per year. That alone would be more than the 54 billion cubic meters imported from Russia in 2021.
In addition, three fixed terminals on land will come on stream in 2025 and 2026, with a capacity of up to 53 billion cubic meters. Although the report states that these are to replace the floating terminals at the same location – this is contradicted by the fact that the minimum lease term for the federally operated terminals is ten years. At least part of the capacity would be available at the same time from 2026 onwards – and thus far more in total than has so far come by pipeline from Russia.
So far, it has mainly been players from academia and civil society, including Environmental Action Germany and the New Climate Institute, who have criticized the German government’s LNG plans and held out the prospect of significant overcapacity. The German government, on the other hand, has not yet provided any figures to support its plans.
Now it is being forced into action: After the Budget Committee of the Bundestag had called on the government at the beginning of November to present an overall concept for the LNG plans by Feb. 15, 2023, at the latest, the committee decided at its clean-up meeting in November, according to information from Berlin.Table, to block the funds requested by the Ministry of Finance for a sixth floating terminal in order to lend weight to this demand.
The internal report confirms the foreseeable overcapacity but comments on the figures cautiously: Overall, the “capacity of existing FSRUs, as well as land-based terminals, would exceed the level of 2021 gas import volumes from Russia,” it says.
In fact, the overcapacity would be much greater than the figures for the German LNG terminals alone indicate. This is because in the current year, around 120 billion cubic meters more gas has been imported via the terminals in France, Belgium, the Netherlands and Spain, which have hardly been utilized in the past, than in 2021 – which explains why the complete loss of supplies from Russia has not led to bottlenecks so far, even without additional terminals.
But that’s not all: In addition, new floating terminals with a capacity of around 50 billion cubic meters per year are supposed to be built in other EU countries by 2025, according to the report. At the same time, gas consumption fell by 25 percent in 2022 in German industry alone, and the BMWK assumes that this saving, achieved primarily through process conversion, will remain permanent.
The overcapacity is likely to be even greater if future gas consumption is taken into account. The Ministry for Economic Affairs estimates that this will fall from around 90 billion cubic meters per year, most recently to a maximum of 70 billion cubic meters by 2030 and 20 billion cubic meters by 2040.
The report does not discuss the obvious conclusion of limiting the number of floating terminals and completely abandoning the fixed ones. However, certain cutbacks are apparent: For the sixth terminal with state participation, which was planned in Hamburg, there is “currently no realistic option for commissioning”, it says – officially “due to line bottlenecks”. For the permanent onshore terminals, the report notes that in no case has a “final investment decision been made”, but that there are “realization risks”.
When asked by Table.Media, the ministry would not comment on the confidential report. However, a spokeswoman explained in general terms that there are also LNG projects “in the planning phase, but whose chances of realization are still fraught with uncertainty”. For this reason, she said, a “safety buffer has been factored into the plans.” In addition, the German plans must also take into account the situation in neighboring countries.
Under former Prime Minister Boris Johnson, the UK’s climate action was far from perfect, but there was momentum for change. Since he was ousted for lying about political gatherings during the Covid lockdowns, the UK government’s climate compass has gone haywire. Rishi Sunak’s indecision about whether to attend the climate conference in Sharm-el-Sheik at all is symptomatic of the government’s zigzag course:
When former UK Prime Minister David Cameron decided in 2015 to tighten planning laws, he effectively banned the construction of onshore wind turbines. Yet, the argument from many Conservative MPs that swathes of the British public was against onshore wind has become impossible to defend. Polling by the Environment and Climate Intelligence Unit (ECIU), a UK think tank, found that 73 percent of Conservative voters would support an onshore wind farm in their area.
After much rowing between pro and anti-wind farm Tory MPs, and Johnson, short-lived prime minister Liz Truss and COP president Alok Sharma all coming out in favor of removing the moratorium, Sunak finally decided to ease restrictions on building onshore wind farms in England. But his climbdown does not give a simple green light to the technology. Rather, the government will now consult on the moratorium with the UK’s planning rules to be updated by the end of April 2023 to reflect the outcome. As Jess Ralston, ECIU’s head of energy says, whether the deployment of onshore wind really does speed up “will now come down to the detail of the planning rule changes”.
Climate campaigners’ cautious optimism in reaction to the wind decision, came with a stark warning that was well summed up Green MP Caroline Lucas. “If this government decision really marks the end of almost decade-long onshore wind ban, it’s certainly a welcome one,” she wrote on Twitter. “But if this is meant to ‘buy off’ off giving the green light to the Cumbria coal mine later this week, it would be totally and utterly shameless.”
And that, of course, is exactly what happened, with the UK approving the construction of a coal mine in Cumbria in the north-west of England. Even if the climate impacts of the new coal mine in Cumbria were put to one side for a minute – the government’s own advisors suggest it will belch out an estimated 400,000 tonnes of greenhouse gas emissions a year – it is important to understand that it will do nothing to bring down energy costs. The mine will produce coaking coal, largely for steel making, even if it is unclear who will buy this coal given at least two UK steel-makers – Tata Steel and British Steel – have said they are unlikely to use it
Further, the decision to approve a coal mine looks downright old-fashioned when steel-makers across Europe are trialing low-carbon steel-making techniques. SSAB in Sweden aims to make steel with almost no carbon footprint a reality by 2026 by using hydrogen produced from renewable energy like wind power instead of coal in the ore reduction process, and emitting water instead of carbon dioxide. A 2021 analysis by Systemiq, an organization showcasing climate action solutions, concluded that green steel will be competitive by 2030; the Cumbrian mine is planning to produce coking coal till 2049.
The British government is not on a climate course when it comes to buildings either. The country’s housing stock is older and less well-insulated than that of almost any other European country. Research published in November found that across England and Wales, more than £10bn could be saved on energy bills each year if leaky homes were upgraded to higher standards. The vast majority of houses in the UK are still heated by gas, with the installation of electric heat pumps being much slower than elsewhere because of a lack of government subsidies to help people switch to more efficient heating systems
Much of the UK is under snow or at least experiencing a very cold snap. The comment by George Monbiot, the UK environmentalist and writer, on Twitter that: “Six layers, scarf and hat and still, in this rented house, I can’t stay warm” was familiar to many in Britain. After years of doing virtually nothing to help people insulate their homes, following Cameron’s decision to “cut the green crap” and slash subsidies for people wanting to make their homes warmer, the government finally announced an extra £6bn in November for wall and loft insulation. This sum will, however, not be available until 2025. This means that if the cold weather continues, people will either be forced to freeze or turn up the heating and pay sky-high energy bills
The government may be forced to take a clearer stance on climate policies, with many predicting a legal backlash against decisions to support fossil fuel infrastructure. Environmental group Greenpeace announced this week that it has started legal proceedings against the government to try and stop more than 100 new licenses to explore for oil and gas in the North Sea. Meanwhile, campaigners against the Cumbrian coal mine are also considering whether to mount a legal challenge. Philippa Nuttall Jones
European climate policy is in for some decisive days: This weekend, the most important parts of the EU’s Fit-for-55 climate package are expected to be finalized in the trilogue. The negotiations will focus primarily on European emissions trading. Associated with this are talks on the Social Climate Fund and the Carbon Border Adjustment Mechanism (CBAM) – as these are big topics in themselves, some call it the jump trilogue.
Currently, the European Emissions Trading System (ETS) covers 40 percent of all emissions in the EU, or the equivalent of 3.3 billion metric tons of carbon dioxide last year. These are emissions from the energy sector and from certain industrial sectors. Because other sectors will be added, such as aviation and maritime transport, the amount will continue to grow. The upcoming reform is expected to reduce emissions faster than before – across all ETS sectors, greenhouse gas emissions are then expected to fall by 61 to 63 percent by 2030 compared to 2005.
In principle, the EU Parliament, Council and Commission will decide this weekend on the European contribution to achieving the 1.5-degree goal. How big this contribution will be currently depend on three key points:
If the carbon price is high, it is comparatively cheap to avoid carbon. This is why the ETS reform aims to reduce the quantity of emission allowances on the market. The shortage is supposed to increase the price. This will mainly be achieved through the one-off cancellation of surplus allowances – also known as rebasing.
It is still unclear how many emission rights are to be withdrawn and when. The parliament initially wants to remove 70 million carbon allowances from the market in 2024 and another 50 million in 2026. This would be equivalent to an emissions reduction of around 63 percent. The Council, on the other hand, wants to reduce emissions by 61 percent through a one-time withdrawal in 2024. This corresponds to around 117 million allowances.
The Commission presented a compromise last week. It proposes a one-off withdrawal of 90 million allowances in 2024. At the same time, it wants to remove more allowances each year than the Parliament and the Council. This would result in a 62 percent reduction in emissions.
However, the Parliament already announced to reject the proposal, because the comparatively small number of one-time cancelled allowances would result in more allowances cumulatively ending up on the market by 2030 than the Council’s proposal. Nevertheless, a compromise seems possible. However, the Parliament insists on a two-phase rebasing. In the trilogue, the question will be whether the member states in the Council will agree to this.
In the second emissions trading, which will run parallel to the existing one, reaching an agreement is considered to be particularly difficult. The disagreement already starts with the question of when ETS 2 will come into force. But the crucial sticking point is another: Unlike in the existing emissions trading system, the carbon price in ETS 2 would affect consumers directly and immediately in their heating bills and at the gas pump. Even the entry price would be quite high. And because a uniform carbon price would apply to the entire EU, the burdens would be very different due to different wage levels.
This is why ETS 2 is drawing criticism – especially from the parliament. MEPs have agreed to differentiate between commercial and private use of fuels (Table.Media reported). Private households should remain exempt from the carbon price, while commercial users would have to pay. The Commission and Council do not envisage such a separation in ETS 2, relying on the price signal to reduce emissions from consumers as well.
The Parliament’s condition for dropping the separation would be adequate social compensation. To this end, the Commission proposed a 72 billion euro Social Climate Fund (SCF), which would be fed from the revenues of ETS 2. However, the member countries do not want to forgo the revenue for their own budgets and want to reduce the fund to 59 billion. The Parliament would agree with the Commission’s proposal, but calls for compensation for consumers from the fund to take effect three years before ETS 2 enters into force to help them prepare for higher heating oil and gasoline prices.
Parliament and Council show little will to compromise on this issue. Both are willing to completely abandon ETS 2 if no compromise can be reached. This would be a major setback for European climate action, as ETS 2 is considered the most effective means of reducing CO2 emissions in the road transport and building sectors, which are in urgent need of decarbonization.
Large parts of the industry currently pay no carbon price, even though they are subject to the ETS. To ensure that they are not at a disadvantage in international competition, they receive free carbon allowances as protection against carbon leakage. This is set to end by the mid-2030s at the latest. Instead, the climate tariff CBAM is to be levied, which manufacturers from non-EU countries have to pay when importing at the EU borders, in order to compensate for the competitive disadvantage of European manufacturers.
The free allowances are to be gradually phased out. The start and end dates as well as the rate of reduction are being negotiated in the Jumbo Trilogue. The negotiations will also deal with the question of how to treat exports from the EU to non-EU countries.
The Parliament shows some flexibility in its position, but insists that at least half of industrial emissions be subject to the carbon price by 2030. If the Council agrees, a compromise would be possible.
As the decisive days begin at the UN Biodiversity Conference COP15 in Montreal, environmental associations and experts warn against losing sight of the impact of intact ecosystems on the climate. The goal of placing 30 percent of the global surface under protection is as uncertain so far as the proposal to preserve the last remaining “intact” natural areas. These are also key to climate mitigation through “nature-based solutions.”
The draft agreement calls for 30 percent of all land and ocean area to be protected by 2030, as scientists at the Intergovernmental Panel on Climate Change (IPCC) and the World Biodiversity Council (IPBS) demand as a minimum. Others want to see as much as 50 percent of all land protected. However, it is currently uncertain whether even the 30/30 target will be adopted in the negotiations and exactly which areas will be protected.
Even the lowest common denominator seems to be at risk: Goal 1 of the draft text envisages the conservation of remaining intact ecosystems: Only three percent of Earth’s surface is still considered untouched and thus truly “intact.” In Europe, there are virtually no intact land areas left. Yet the EU, as part of a “High Ambition Coalition,” is particularly committed to their protection. The majority of these natural areas, however, are located in countries like Brazil, Russia and some African states. While these countries also want to minimize the loss of ecosystems, they do not want to jeopardize their economic development by protecting the environment.
This could have far-reaching effects on the climate. Particularly with their function as natural carbon sinks, intact ecosystems play a crucial role in climate mitigation.
“Everyone talks about forests. The percentage of forest cover is easy to measure. But what matters most is the quality of the forests,” says Joe Walston, Vice President of the Wildlife Conservation Society (WCS). “The large intact forests of the Amazon, Congo Basin or New Guinea play a disproportionately large role in climate change mitigation.”
The same applies to savannas, peatlands and coral reefs. In addition to preserving intact ecosystems, Walston calls for specific targets to protect certain species that have a measurably positive impact on the climate.
The obligation to restore damaged and destroyed ecosystems is also one of the crucial passages of the agreement, for example through reforestation or the rewetting of peatlands. With the planned Nature Restoration Law in its baggage, the EU wants to set a good example here. After all, according to the EU Commission, 80 percent of Europe’s land is in ecologically poor condition.
“Renaturalization is important. But under no circumstances should this opportunity make us forget to protect what we still have, or we’ll be doing the climate a disservice,” Walston says. Planting trees is in vogue, including in carbon offsets. “But no amount of reforestation can replace intact systems that are hundreds or thousands of years old, and 80 percent of planting fails because it’s ultimately the wrong species in the wrong place.”
Climate action is also making no headway in reducing environmentally harmful subsidies. At present, around 1.8 trillion dollars of taxpayers’ money is invested annually worldwide in environmentally harmful activities, most of it in fossil energies.
But the original goal of eliminating 500 billion dollars in harmful subsidies annually has apparently already been significantly watered down in the negotiations so far. The specific amount is unlikely to make it into the text, and a group of countries, including Brazil, Argentina, Indonesia, Japan and India, are vehemently opposed to the phrase “abolish”.
The so-called high-level segment with environment ministers begins today in Montreal. So far, there has been little progress on the targets and financing. An extension of COP15 beyond its end date of December 19 is considered certain.
The idea of a climate club to complement the international regime of the United Nations Framework Convention on Climate Change (UNFCCC) has been discussed in economics for over a decade. In 2015, Nobel economics laureate William Nordhaus proposed that members of such a club should coordinate their emissions trading systems or CO2 taxes among themselves. In addition, they should jointly levy external tariffs on emissions-intensive products from countries that do not use CO2 pricing instruments in order to compensate for any competitive disadvantages for domestic industry.
Olaf Scholz, then German finance minister, introduced the idea into the political debate in 2021. However, it became apparent that the concept of a climate club based on Nordhaus’ model, which sounds so elegant in economic theory, can hardly be implemented in political practice. True, the EU is pressing ahead with its plans for an external CO2 tariff. But reality has shown how complex it is to coordinate various CO2 pricing instruments across the borders of states or alliances of states. For example, the bilateral negotiations between the EU and Switzerland alone to link their emissions trading systems took almost ten years. The linking agreement has now been in force since 2020.
The main difficulty, however, was that Nordhaus’s idea of a climate club met with little political response from the G7 partner countries and beyond. It already played a minor role in the final declaration of the G7 summit held at Schloss Elmau in June. With the Terms of Reference now published, the statutes for the G7 climate club, Nordhaus’ concept finally fell into practical irrelevance.
The document now only states that the members of the Climate Club will “explore and discuss possible measures to improve the measurement and reporting of emissions.” There is no longer any mention of coordinating and harmonizing CO2 pricing.
However, this does not mean that the Climate Club failed – on the contrary. The Climate Club statutes that have now been adopted are not a breakthrough. But it does open up the possibility of developing the idea further in a constructive way – towards an instrument that can be used to provide very concrete support for the transformation of heavy industry to climate-friendly production.
The focus makes sense for several reasons. Just a few years ago, the cement, steel and basic chemical industries were considered “hard to abate,” industries whose emissions could only be brought to zero with great difficulty. In recent years, however, the industry has already moved a long way, for example, in the steel industry, where a whole series of major corporations have set their own climate protection targets and announced investments in new climate-friendly steel mills.
But to put their plans into practice, they need government support, for example by building the necessary hydrogen infrastructure. After all, according to the current state of the art, hydrogen is virtually indispensable for the production of green steel.
Another challenge is that green steel, for example, will be more expensive than conventionally produced steel for the foreseeable future. To invest in climate-friendly production, the industry needs a certain degree of certainty that it will also find customers at higher prices.
If countries now make a joint commitment to invest in a market for climate-friendly products and the necessary infrastructure, this reduces uncertainty for industry and makes it easier for companies to decide to invest in green production facilities for their part. International agreements such as the Climate Club increase the credibility of the promises.
There are already a number of international initiatives working in this direction. What is missing, however, is a central institution to help coordinate these initiatives. The statute defines exactly that as a function of the G7 Climate Club. It serves as an “enabling framework for enhanced cooperation, better coordination and possible joint action.”
The Terms of Reference now adopted are an important step towards further operationalizing the Climate Club. They prevent the initiative from simply fizzling out after the end of Germany’s G7 presidency. For example, they stipulate that the IEA and the OECD should set up an interim secretariat for the Climate Club. A working group will manage the further details under the leadership of Germany.
However, for the Climate Club to actually be a success, the German government must promote it much more concretely and state its added value even more clearly: It can provide a framework at the international level that helps all stakeholders to jointly exploit the opportunities of the transformation – provided that a critical mass of countries join it and its rules achieve a sufficient degree of binding force.
In the past, the focus of international climate policy has often been on sharing the burden of climate protection fairly. The original idea of the climate club, as outlined by William Nordhaus, also follows this approach. Most recently, however, it has become increasingly clear that the question of how to distribute the transformation opportunities also offers great potential for conflict. China is already the technology leader in a whole range of key industries. With the Inflation Reduction Act, the USA has also created an instrument to build up green industries in its own country.
If everyone is now to be given a chance to benefit from the transformation together with the help of a climate club, this must not only be about the opportunities for the industrialized countries. Emerging and developing countries must also be included. This is perhaps the biggest weakness in the statutes of the G7 climate club: Contrary to what was originally announced, it has obviously not been possible to get other partner countries beyond the G7 on board. This has to change. Because as a pure G7 initiative, the club has no chance of survival.
Lukas Hermwille is a Senior Researcher in the International Climate Policy Research Department at the Wuppertal Institute for Climate, Environment and Energy. His research includes the design of sectoral climate clubs. Within the framework of various research projects, he also advises the German Federal Government and the EU Commission.
Christiana Figueres wants to spread optimism. Her mantra: We can still stop climate change. But people are inherently pessimistic beings, Figueres writes in her book “The Future We Choose.” “We can’t do anything to stop it. This learned reaction is not only untrue, it’s become fundamentally irresponsible” she writes with co-author Tom Rivett-Carnac. “If you want to help address climate change, you have to teach yourself a different response.”
Everyone should allow room for positive news, for example, the fact that Costa Rica managed to use 100 percent clean energy and California plans to do just that. “Consider the lot of the stonemason in medieval Europe building one of the great cathedrals,” she writes. He knew he would not live to see it finished, but still “worked patiently and carefully on his one piece, knowing he was part of a great collective endeavor.”
Yet for a long time in her career, there was little reason for optimism. “Not in my lifetime,” Christiana Figueres said at her inaugural press conference in Bonn when asked whether a global agreement would ever be possible again. Just six months after the big failed 2009 UN Climate Change Conference in Copenhagen, Christiana Figueres was appointed Executive Secretary of the UN Framework Convention on Climate Change (UNFCCC). Her mission: first, sweep up the pieces. “The global mood on climate change was in the trash can,” Figueres said in a TED Talk. No one thought a global agreement was ever possible again. Neither did she – until that day in Paris.
On December 12, 2015, 195 countries signed the Paris Climate Agreement – with the goal of keeping global warming well below two degrees Celsius. Figueres was in charge at the negotiating level. Paris was her ray of hope.
The 66-year-old Costa Rican comes from a political family. Her father was three times president of the Central American country. During his time the national army was abolished. Her mother, born in Denmark, was ambassador to Israel and a member of Costa Rica’s parliament.
After studying social anthropology at Swarthmore College in Pennsylvania and the London School of Economics, Figueres began her career as ambassador to Bonn (1982 to 1985). She received the Order of Merit of the Federal Republic of Germany for strengthening the relationship between the two countries. She then returned to her homeland and, among other things, negotiated the 1997 Kyoto Protocol for Costa Rica. Since then, she has been committed to the fight against climate change. She is the mother of two daughters.
After she became an optimist, Figueres changed her tone in the office of UNFCCC chief. “Throughout the whole process, we paid attention to the underlying challenging dynamics, guiding them into a constructive space,” she reveals about the Paris negotiations in her book.
Today, Figueres is an author, speaker and podcaster. She continues to spread her optimism, trying to educate people about the climate crisis. Only once did she fail. In 2016 – one year after Paris – Figueres wanted to become UN Secretary General. She ran as a reformer and was long considered the favorite, but could not get enough support in two rounds of voting. As a result, she withdrew. But that did not stop her from continuing to get involved. Tom Schmidtgen
Global climate policy produces many big ideas that end up failing because of minor issues. This could also be the fate of the “Bridgetown Initiative” of the Prime Minister of Barbados, Mia Mottley, to use special drawing rights to finance global climate action. The Deutsche Bundesbank is not playing along, and the ECB is also skeptical, as Bernhard Pötter found out. But without a green light from the central banks, it will be difficult.
Even the climate club initiative of German Chancellor Olaf Scholz started with a lot of verve but now struggles to find supporters. The approval from potential partner countries is limited, and the criteria have been relaxed. Lukas Hermwille of the German Wuppertal Institute describes how the climate club would have to be further developed to guarantee companies more security for the green transformation.
On the other hand, the plans of the Federal Ministry of Economics and Technology for liquefied natural gas far exceed actual demand. This is also revealed by an internal report from the ministry itself, which Malte Kreutzfeld was able to access. One first plan for an LNG terminal in Hamburg is to be scrapped. If all planned LNG terminals are built, there is the risk of either massive misinvestment or more gas imports than are compatible with the climate targets.
A great deal of hope for international climate finance is placed in special drawing rights – but Germany and presumably other euro countries will not pass on their special drawing rights at the International Monetary Fund to poorer countries. The German Bundesbank (Federal Bank) and the German Federal Ministry of Finance fundamentally oppose such a transfer. And the European Central Bank (ECB) is also highly skeptical about the instrument. This is the result of a Climate.Table inquiry submitted to these institutions.
The Bundesbank, which owns and manages Germany’s SDRs, said in a written response that it “cannot transfer SDRs to the World Bank, other countries, or multilateral development banks.” This is because “development and climate policy are government responsibilities. In this respect, the provision of funds by the Bundesbank – be it in the form of loans or gifts – to the World Bank for these purposes is not possible.”
The European Central Bank (ECB) also confirmed this position upon inquiry: “Making special drawing rights available from eurozone national banks to multilateral development banks or individual countries would not be compatible with the requirements of the ECB Treaty as it would violate the prohibition on monetary financing.” Thus, the prohibition on direct transfers applies not only to the Bundesbank, but to all central banks in the eurozone. The ECB sees its obligation to contribute to climate action, but “within the framework of our mandate,” it said. “Government and parliaments are in the leading position in this regard.”
However, many hopes rest on the idea of using SDR monetary creation to meet the huge investment needs of international climate change mitigation. SDRs are “reserve currencies” that all member countries of the International Monetary Fund (IMF) can use to create financial liquidity and avoid potential crises in the financial system. Their funds are offered at low-interest rates that allow poor countries to finance projects at significantly better terms than on the market.
During COP27, the idea of SDRs as a way for new and innovative ways of climate finance was broadly and favorably discussed. It is part of the so-called “Bridgetown Initiative” with which Prime Minister of Barbados Mia Mottley campaigns for a reform of the global financial system. The agenda is based, among other things, on the proposal that industrialized countries should use their SDRs at the IMF to provide other countries and institutions with cheap money for climate action.
According to a study by a panel of experts, around one trillion dollars a year will be necessary to achieve the Paris climate targets by 2030. This money is to flow into investments in renewables, adaptation and compensation for climate damage. But so far, the industrialized countries have not even managed to mobilize the promised 100 billion dollars every year after 2020.
The idea to use SDRs for climate action was inspired by the IMF’s actions during the Covid crisis: In the summer of 2021, the IMF created a Resilience and Sustainability Trust (RST), to which countries contributed a total of 650 billion US dollars via their SDRs. The argument at the time was that if the countries ran into financial trouble due to the Covid costs, it would also pose a serious threat to the global financial system.
Climate activists around Mia Mottley now make a similar argument. And the head of the UN Development Program Achim Steiner also warned Climate.Table of a massive debt crisis in poor countries caused by the effects of climate change (Climate.Table reported).
A fund solution akin to the RSF would then also be conceivable for climate financing, the ECB stated. “Such contributions have to be decided by IMF members. Eurozone central banks can participate in IMF funds and initiatives with their SDRs as long as their positions therefrom are in SDRs,” an ECB spokesperson said.
This is why the IMF designed its RSF in such a way that allows member countries to use their special drawing rights – and still not jeopardize them as currency reserves. France and Italy have also made use of this option.
However, the Germans put a stop to that, too: The money for such a fund cannot be generated from SDRs, at least not from Germany, according to the Federal Ministry of Finance. That would only be possible via budgetary funds from the parliament. “Germany generally cannot participate in the on-lending of SDRs to trust funds of the IMF or development banks (SDR channeling), as SDRs are part of the foreign exchange reserves of the independent Bundesbank, which decides on them and rejects on-lending for legal and regulatory reasons,” a spokesman for the Federal Ministry of Finance replied to a Climate.Table inquiry.
The German government makes “substantial contributions to both the Resilience and Sustainability Trust (RST) and the IMF’s Poverty Reduction and Growth Trust (PRGT) from budgetary resources.” On the RST, it states, “Germany supports this trust with a loan contribution of 6.3 billion euros from budgetary resources” – a traditional and entirely different structure than favored by the supporters of the “Bridgetown Agenda.”
The German Federal Ministry for Economic Affairs and Climate Action (BMWK) expects significant overcapacity regarding the planning and construction of LNG terminals on the German North Sea and Baltic Sea coasts. According to a confidential preparatory paper for a meeting this week at the Chancellor’s Office, the ministry puts the capacity of the ten planned floating terminals due to come on stream this winter and next at 53 to 68 billion cubic meters of gas per year. That alone would be more than the 54 billion cubic meters imported from Russia in 2021.
In addition, three fixed terminals on land will come on stream in 2025 and 2026, with a capacity of up to 53 billion cubic meters. Although the report states that these are to replace the floating terminals at the same location – this is contradicted by the fact that the minimum lease term for the federally operated terminals is ten years. At least part of the capacity would be available at the same time from 2026 onwards – and thus far more in total than has so far come by pipeline from Russia.
So far, it has mainly been players from academia and civil society, including Environmental Action Germany and the New Climate Institute, who have criticized the German government’s LNG plans and held out the prospect of significant overcapacity. The German government, on the other hand, has not yet provided any figures to support its plans.
Now it is being forced into action: After the Budget Committee of the Bundestag had called on the government at the beginning of November to present an overall concept for the LNG plans by Feb. 15, 2023, at the latest, the committee decided at its clean-up meeting in November, according to information from Berlin.Table, to block the funds requested by the Ministry of Finance for a sixth floating terminal in order to lend weight to this demand.
The internal report confirms the foreseeable overcapacity but comments on the figures cautiously: Overall, the “capacity of existing FSRUs, as well as land-based terminals, would exceed the level of 2021 gas import volumes from Russia,” it says.
In fact, the overcapacity would be much greater than the figures for the German LNG terminals alone indicate. This is because in the current year, around 120 billion cubic meters more gas has been imported via the terminals in France, Belgium, the Netherlands and Spain, which have hardly been utilized in the past, than in 2021 – which explains why the complete loss of supplies from Russia has not led to bottlenecks so far, even without additional terminals.
But that’s not all: In addition, new floating terminals with a capacity of around 50 billion cubic meters per year are supposed to be built in other EU countries by 2025, according to the report. At the same time, gas consumption fell by 25 percent in 2022 in German industry alone, and the BMWK assumes that this saving, achieved primarily through process conversion, will remain permanent.
The overcapacity is likely to be even greater if future gas consumption is taken into account. The Ministry for Economic Affairs estimates that this will fall from around 90 billion cubic meters per year, most recently to a maximum of 70 billion cubic meters by 2030 and 20 billion cubic meters by 2040.
The report does not discuss the obvious conclusion of limiting the number of floating terminals and completely abandoning the fixed ones. However, certain cutbacks are apparent: For the sixth terminal with state participation, which was planned in Hamburg, there is “currently no realistic option for commissioning”, it says – officially “due to line bottlenecks”. For the permanent onshore terminals, the report notes that in no case has a “final investment decision been made”, but that there are “realization risks”.
When asked by Table.Media, the ministry would not comment on the confidential report. However, a spokeswoman explained in general terms that there are also LNG projects “in the planning phase, but whose chances of realization are still fraught with uncertainty”. For this reason, she said, a “safety buffer has been factored into the plans.” In addition, the German plans must also take into account the situation in neighboring countries.
Under former Prime Minister Boris Johnson, the UK’s climate action was far from perfect, but there was momentum for change. Since he was ousted for lying about political gatherings during the Covid lockdowns, the UK government’s climate compass has gone haywire. Rishi Sunak’s indecision about whether to attend the climate conference in Sharm-el-Sheik at all is symptomatic of the government’s zigzag course:
When former UK Prime Minister David Cameron decided in 2015 to tighten planning laws, he effectively banned the construction of onshore wind turbines. Yet, the argument from many Conservative MPs that swathes of the British public was against onshore wind has become impossible to defend. Polling by the Environment and Climate Intelligence Unit (ECIU), a UK think tank, found that 73 percent of Conservative voters would support an onshore wind farm in their area.
After much rowing between pro and anti-wind farm Tory MPs, and Johnson, short-lived prime minister Liz Truss and COP president Alok Sharma all coming out in favor of removing the moratorium, Sunak finally decided to ease restrictions on building onshore wind farms in England. But his climbdown does not give a simple green light to the technology. Rather, the government will now consult on the moratorium with the UK’s planning rules to be updated by the end of April 2023 to reflect the outcome. As Jess Ralston, ECIU’s head of energy says, whether the deployment of onshore wind really does speed up “will now come down to the detail of the planning rule changes”.
Climate campaigners’ cautious optimism in reaction to the wind decision, came with a stark warning that was well summed up Green MP Caroline Lucas. “If this government decision really marks the end of almost decade-long onshore wind ban, it’s certainly a welcome one,” she wrote on Twitter. “But if this is meant to ‘buy off’ off giving the green light to the Cumbria coal mine later this week, it would be totally and utterly shameless.”
And that, of course, is exactly what happened, with the UK approving the construction of a coal mine in Cumbria in the north-west of England. Even if the climate impacts of the new coal mine in Cumbria were put to one side for a minute – the government’s own advisors suggest it will belch out an estimated 400,000 tonnes of greenhouse gas emissions a year – it is important to understand that it will do nothing to bring down energy costs. The mine will produce coaking coal, largely for steel making, even if it is unclear who will buy this coal given at least two UK steel-makers – Tata Steel and British Steel – have said they are unlikely to use it
Further, the decision to approve a coal mine looks downright old-fashioned when steel-makers across Europe are trialing low-carbon steel-making techniques. SSAB in Sweden aims to make steel with almost no carbon footprint a reality by 2026 by using hydrogen produced from renewable energy like wind power instead of coal in the ore reduction process, and emitting water instead of carbon dioxide. A 2021 analysis by Systemiq, an organization showcasing climate action solutions, concluded that green steel will be competitive by 2030; the Cumbrian mine is planning to produce coking coal till 2049.
The British government is not on a climate course when it comes to buildings either. The country’s housing stock is older and less well-insulated than that of almost any other European country. Research published in November found that across England and Wales, more than £10bn could be saved on energy bills each year if leaky homes were upgraded to higher standards. The vast majority of houses in the UK are still heated by gas, with the installation of electric heat pumps being much slower than elsewhere because of a lack of government subsidies to help people switch to more efficient heating systems
Much of the UK is under snow or at least experiencing a very cold snap. The comment by George Monbiot, the UK environmentalist and writer, on Twitter that: “Six layers, scarf and hat and still, in this rented house, I can’t stay warm” was familiar to many in Britain. After years of doing virtually nothing to help people insulate their homes, following Cameron’s decision to “cut the green crap” and slash subsidies for people wanting to make their homes warmer, the government finally announced an extra £6bn in November for wall and loft insulation. This sum will, however, not be available until 2025. This means that if the cold weather continues, people will either be forced to freeze or turn up the heating and pay sky-high energy bills
The government may be forced to take a clearer stance on climate policies, with many predicting a legal backlash against decisions to support fossil fuel infrastructure. Environmental group Greenpeace announced this week that it has started legal proceedings against the government to try and stop more than 100 new licenses to explore for oil and gas in the North Sea. Meanwhile, campaigners against the Cumbrian coal mine are also considering whether to mount a legal challenge. Philippa Nuttall Jones
European climate policy is in for some decisive days: This weekend, the most important parts of the EU’s Fit-for-55 climate package are expected to be finalized in the trilogue. The negotiations will focus primarily on European emissions trading. Associated with this are talks on the Social Climate Fund and the Carbon Border Adjustment Mechanism (CBAM) – as these are big topics in themselves, some call it the jump trilogue.
Currently, the European Emissions Trading System (ETS) covers 40 percent of all emissions in the EU, or the equivalent of 3.3 billion metric tons of carbon dioxide last year. These are emissions from the energy sector and from certain industrial sectors. Because other sectors will be added, such as aviation and maritime transport, the amount will continue to grow. The upcoming reform is expected to reduce emissions faster than before – across all ETS sectors, greenhouse gas emissions are then expected to fall by 61 to 63 percent by 2030 compared to 2005.
In principle, the EU Parliament, Council and Commission will decide this weekend on the European contribution to achieving the 1.5-degree goal. How big this contribution will be currently depend on three key points:
If the carbon price is high, it is comparatively cheap to avoid carbon. This is why the ETS reform aims to reduce the quantity of emission allowances on the market. The shortage is supposed to increase the price. This will mainly be achieved through the one-off cancellation of surplus allowances – also known as rebasing.
It is still unclear how many emission rights are to be withdrawn and when. The parliament initially wants to remove 70 million carbon allowances from the market in 2024 and another 50 million in 2026. This would be equivalent to an emissions reduction of around 63 percent. The Council, on the other hand, wants to reduce emissions by 61 percent through a one-time withdrawal in 2024. This corresponds to around 117 million allowances.
The Commission presented a compromise last week. It proposes a one-off withdrawal of 90 million allowances in 2024. At the same time, it wants to remove more allowances each year than the Parliament and the Council. This would result in a 62 percent reduction in emissions.
However, the Parliament already announced to reject the proposal, because the comparatively small number of one-time cancelled allowances would result in more allowances cumulatively ending up on the market by 2030 than the Council’s proposal. Nevertheless, a compromise seems possible. However, the Parliament insists on a two-phase rebasing. In the trilogue, the question will be whether the member states in the Council will agree to this.
In the second emissions trading, which will run parallel to the existing one, reaching an agreement is considered to be particularly difficult. The disagreement already starts with the question of when ETS 2 will come into force. But the crucial sticking point is another: Unlike in the existing emissions trading system, the carbon price in ETS 2 would affect consumers directly and immediately in their heating bills and at the gas pump. Even the entry price would be quite high. And because a uniform carbon price would apply to the entire EU, the burdens would be very different due to different wage levels.
This is why ETS 2 is drawing criticism – especially from the parliament. MEPs have agreed to differentiate between commercial and private use of fuels (Table.Media reported). Private households should remain exempt from the carbon price, while commercial users would have to pay. The Commission and Council do not envisage such a separation in ETS 2, relying on the price signal to reduce emissions from consumers as well.
The Parliament’s condition for dropping the separation would be adequate social compensation. To this end, the Commission proposed a 72 billion euro Social Climate Fund (SCF), which would be fed from the revenues of ETS 2. However, the member countries do not want to forgo the revenue for their own budgets and want to reduce the fund to 59 billion. The Parliament would agree with the Commission’s proposal, but calls for compensation for consumers from the fund to take effect three years before ETS 2 enters into force to help them prepare for higher heating oil and gasoline prices.
Parliament and Council show little will to compromise on this issue. Both are willing to completely abandon ETS 2 if no compromise can be reached. This would be a major setback for European climate action, as ETS 2 is considered the most effective means of reducing CO2 emissions in the road transport and building sectors, which are in urgent need of decarbonization.
Large parts of the industry currently pay no carbon price, even though they are subject to the ETS. To ensure that they are not at a disadvantage in international competition, they receive free carbon allowances as protection against carbon leakage. This is set to end by the mid-2030s at the latest. Instead, the climate tariff CBAM is to be levied, which manufacturers from non-EU countries have to pay when importing at the EU borders, in order to compensate for the competitive disadvantage of European manufacturers.
The free allowances are to be gradually phased out. The start and end dates as well as the rate of reduction are being negotiated in the Jumbo Trilogue. The negotiations will also deal with the question of how to treat exports from the EU to non-EU countries.
The Parliament shows some flexibility in its position, but insists that at least half of industrial emissions be subject to the carbon price by 2030. If the Council agrees, a compromise would be possible.
As the decisive days begin at the UN Biodiversity Conference COP15 in Montreal, environmental associations and experts warn against losing sight of the impact of intact ecosystems on the climate. The goal of placing 30 percent of the global surface under protection is as uncertain so far as the proposal to preserve the last remaining “intact” natural areas. These are also key to climate mitigation through “nature-based solutions.”
The draft agreement calls for 30 percent of all land and ocean area to be protected by 2030, as scientists at the Intergovernmental Panel on Climate Change (IPCC) and the World Biodiversity Council (IPBS) demand as a minimum. Others want to see as much as 50 percent of all land protected. However, it is currently uncertain whether even the 30/30 target will be adopted in the negotiations and exactly which areas will be protected.
Even the lowest common denominator seems to be at risk: Goal 1 of the draft text envisages the conservation of remaining intact ecosystems: Only three percent of Earth’s surface is still considered untouched and thus truly “intact.” In Europe, there are virtually no intact land areas left. Yet the EU, as part of a “High Ambition Coalition,” is particularly committed to their protection. The majority of these natural areas, however, are located in countries like Brazil, Russia and some African states. While these countries also want to minimize the loss of ecosystems, they do not want to jeopardize their economic development by protecting the environment.
This could have far-reaching effects on the climate. Particularly with their function as natural carbon sinks, intact ecosystems play a crucial role in climate mitigation.
“Everyone talks about forests. The percentage of forest cover is easy to measure. But what matters most is the quality of the forests,” says Joe Walston, Vice President of the Wildlife Conservation Society (WCS). “The large intact forests of the Amazon, Congo Basin or New Guinea play a disproportionately large role in climate change mitigation.”
The same applies to savannas, peatlands and coral reefs. In addition to preserving intact ecosystems, Walston calls for specific targets to protect certain species that have a measurably positive impact on the climate.
The obligation to restore damaged and destroyed ecosystems is also one of the crucial passages of the agreement, for example through reforestation or the rewetting of peatlands. With the planned Nature Restoration Law in its baggage, the EU wants to set a good example here. After all, according to the EU Commission, 80 percent of Europe’s land is in ecologically poor condition.
“Renaturalization is important. But under no circumstances should this opportunity make us forget to protect what we still have, or we’ll be doing the climate a disservice,” Walston says. Planting trees is in vogue, including in carbon offsets. “But no amount of reforestation can replace intact systems that are hundreds or thousands of years old, and 80 percent of planting fails because it’s ultimately the wrong species in the wrong place.”
Climate action is also making no headway in reducing environmentally harmful subsidies. At present, around 1.8 trillion dollars of taxpayers’ money is invested annually worldwide in environmentally harmful activities, most of it in fossil energies.
But the original goal of eliminating 500 billion dollars in harmful subsidies annually has apparently already been significantly watered down in the negotiations so far. The specific amount is unlikely to make it into the text, and a group of countries, including Brazil, Argentina, Indonesia, Japan and India, are vehemently opposed to the phrase “abolish”.
The so-called high-level segment with environment ministers begins today in Montreal. So far, there has been little progress on the targets and financing. An extension of COP15 beyond its end date of December 19 is considered certain.
The idea of a climate club to complement the international regime of the United Nations Framework Convention on Climate Change (UNFCCC) has been discussed in economics for over a decade. In 2015, Nobel economics laureate William Nordhaus proposed that members of such a club should coordinate their emissions trading systems or CO2 taxes among themselves. In addition, they should jointly levy external tariffs on emissions-intensive products from countries that do not use CO2 pricing instruments in order to compensate for any competitive disadvantages for domestic industry.
Olaf Scholz, then German finance minister, introduced the idea into the political debate in 2021. However, it became apparent that the concept of a climate club based on Nordhaus’ model, which sounds so elegant in economic theory, can hardly be implemented in political practice. True, the EU is pressing ahead with its plans for an external CO2 tariff. But reality has shown how complex it is to coordinate various CO2 pricing instruments across the borders of states or alliances of states. For example, the bilateral negotiations between the EU and Switzerland alone to link their emissions trading systems took almost ten years. The linking agreement has now been in force since 2020.
The main difficulty, however, was that Nordhaus’s idea of a climate club met with little political response from the G7 partner countries and beyond. It already played a minor role in the final declaration of the G7 summit held at Schloss Elmau in June. With the Terms of Reference now published, the statutes for the G7 climate club, Nordhaus’ concept finally fell into practical irrelevance.
The document now only states that the members of the Climate Club will “explore and discuss possible measures to improve the measurement and reporting of emissions.” There is no longer any mention of coordinating and harmonizing CO2 pricing.
However, this does not mean that the Climate Club failed – on the contrary. The Climate Club statutes that have now been adopted are not a breakthrough. But it does open up the possibility of developing the idea further in a constructive way – towards an instrument that can be used to provide very concrete support for the transformation of heavy industry to climate-friendly production.
The focus makes sense for several reasons. Just a few years ago, the cement, steel and basic chemical industries were considered “hard to abate,” industries whose emissions could only be brought to zero with great difficulty. In recent years, however, the industry has already moved a long way, for example, in the steel industry, where a whole series of major corporations have set their own climate protection targets and announced investments in new climate-friendly steel mills.
But to put their plans into practice, they need government support, for example by building the necessary hydrogen infrastructure. After all, according to the current state of the art, hydrogen is virtually indispensable for the production of green steel.
Another challenge is that green steel, for example, will be more expensive than conventionally produced steel for the foreseeable future. To invest in climate-friendly production, the industry needs a certain degree of certainty that it will also find customers at higher prices.
If countries now make a joint commitment to invest in a market for climate-friendly products and the necessary infrastructure, this reduces uncertainty for industry and makes it easier for companies to decide to invest in green production facilities for their part. International agreements such as the Climate Club increase the credibility of the promises.
There are already a number of international initiatives working in this direction. What is missing, however, is a central institution to help coordinate these initiatives. The statute defines exactly that as a function of the G7 Climate Club. It serves as an “enabling framework for enhanced cooperation, better coordination and possible joint action.”
The Terms of Reference now adopted are an important step towards further operationalizing the Climate Club. They prevent the initiative from simply fizzling out after the end of Germany’s G7 presidency. For example, they stipulate that the IEA and the OECD should set up an interim secretariat for the Climate Club. A working group will manage the further details under the leadership of Germany.
However, for the Climate Club to actually be a success, the German government must promote it much more concretely and state its added value even more clearly: It can provide a framework at the international level that helps all stakeholders to jointly exploit the opportunities of the transformation – provided that a critical mass of countries join it and its rules achieve a sufficient degree of binding force.
In the past, the focus of international climate policy has often been on sharing the burden of climate protection fairly. The original idea of the climate club, as outlined by William Nordhaus, also follows this approach. Most recently, however, it has become increasingly clear that the question of how to distribute the transformation opportunities also offers great potential for conflict. China is already the technology leader in a whole range of key industries. With the Inflation Reduction Act, the USA has also created an instrument to build up green industries in its own country.
If everyone is now to be given a chance to benefit from the transformation together with the help of a climate club, this must not only be about the opportunities for the industrialized countries. Emerging and developing countries must also be included. This is perhaps the biggest weakness in the statutes of the G7 climate club: Contrary to what was originally announced, it has obviously not been possible to get other partner countries beyond the G7 on board. This has to change. Because as a pure G7 initiative, the club has no chance of survival.
Lukas Hermwille is a Senior Researcher in the International Climate Policy Research Department at the Wuppertal Institute for Climate, Environment and Energy. His research includes the design of sectoral climate clubs. Within the framework of various research projects, he also advises the German Federal Government and the EU Commission.
Christiana Figueres wants to spread optimism. Her mantra: We can still stop climate change. But people are inherently pessimistic beings, Figueres writes in her book “The Future We Choose.” “We can’t do anything to stop it. This learned reaction is not only untrue, it’s become fundamentally irresponsible” she writes with co-author Tom Rivett-Carnac. “If you want to help address climate change, you have to teach yourself a different response.”
Everyone should allow room for positive news, for example, the fact that Costa Rica managed to use 100 percent clean energy and California plans to do just that. “Consider the lot of the stonemason in medieval Europe building one of the great cathedrals,” she writes. He knew he would not live to see it finished, but still “worked patiently and carefully on his one piece, knowing he was part of a great collective endeavor.”
Yet for a long time in her career, there was little reason for optimism. “Not in my lifetime,” Christiana Figueres said at her inaugural press conference in Bonn when asked whether a global agreement would ever be possible again. Just six months after the big failed 2009 UN Climate Change Conference in Copenhagen, Christiana Figueres was appointed Executive Secretary of the UN Framework Convention on Climate Change (UNFCCC). Her mission: first, sweep up the pieces. “The global mood on climate change was in the trash can,” Figueres said in a TED Talk. No one thought a global agreement was ever possible again. Neither did she – until that day in Paris.
On December 12, 2015, 195 countries signed the Paris Climate Agreement – with the goal of keeping global warming well below two degrees Celsius. Figueres was in charge at the negotiating level. Paris was her ray of hope.
The 66-year-old Costa Rican comes from a political family. Her father was three times president of the Central American country. During his time the national army was abolished. Her mother, born in Denmark, was ambassador to Israel and a member of Costa Rica’s parliament.
After studying social anthropology at Swarthmore College in Pennsylvania and the London School of Economics, Figueres began her career as ambassador to Bonn (1982 to 1985). She received the Order of Merit of the Federal Republic of Germany for strengthening the relationship between the two countries. She then returned to her homeland and, among other things, negotiated the 1997 Kyoto Protocol for Costa Rica. Since then, she has been committed to the fight against climate change. She is the mother of two daughters.
After she became an optimist, Figueres changed her tone in the office of UNFCCC chief. “Throughout the whole process, we paid attention to the underlying challenging dynamics, guiding them into a constructive space,” she reveals about the Paris negotiations in her book.
Today, Figueres is an author, speaker and podcaster. She continues to spread her optimism, trying to educate people about the climate crisis. Only once did she fail. In 2016 – one year after Paris – Figueres wanted to become UN Secretary General. She ran as a reformer and was long considered the favorite, but could not get enough support in two rounds of voting. As a result, she withdrew. But that did not stop her from continuing to get involved. Tom Schmidtgen
