[let the bullying commence-cr]
Wesley Morgan, Griffith University
Germany has announced plans for a new climate alliance between the world’s advanced economies, in a move that promises to transform international climate action.
This year, Germany is the president of the G7 – a key forum for wealthy democracies to discuss solutions to global challenges.
New German Chancellor Olaf Scholz, who replaced long-time leader Angela Merkel in December last year, wants the G7 nations to become founding members of an international “carbon club”. This alliance of countries would coordinate shared climate policy standards and impose costs on countries that don’t meet them.
The proposal should ring alarm bells in Canberra. It is likely to mean economic and diplomatic costs for Australia, and further isolate this nation as a climate laggard on the world stage. To avoid this, Australia should at least match the climate ambition of G7 countries, by pledging to halve greenhouse gas emissions this decade.
What is a climate club?
The “climate club” concept was developed by Nobel-prize winning economist William Nordhaus in 2015, and has since gained ground in international policy circles.
United Nations climate agreements – such as the 1997 Kyoto Protocol and the 2015 Paris Agreement – are voluntary. Nordhaus argues this provides an incentive for some nations, overly focused on their own national interests, to seek to minimise their share of the global costs of climate action.
So while responsible nations bear the cost of switching to new, cleaner technologies, the “free-riding” nations benefit from those technologies and a potentially safer climate while failing to make adequate cuts to their own domestic emissions.
To address this problem, Nordhaus proposes a “club” model for climate cooperation. Club members – those countries who move first to take climate action – would be rewarded and protected from competitive disadvantage.
Members would harmonise their plans to reduce greenhouse gas emissions and work toward a shared goal. And nations that do not meet their global obligations would incur penalties, such as a levy on exports to club member nations.
How the G7 could become a climate club
In addition to Germany, the G7 comprises the United States, United Kingdom, France, Italy, Japan and Canada.
Just a month after being elected German chancellor, Olaf Scholz announced at the World Economic Forum in January that Germany intends to turn the G7 into the nucleus of an international climate club.
Scholz has been keen on the climate club idea for some time. Last August, as Germany’s finance minister, he proposed an “A-B-C” model that would be:
- ambitious: all members would commit to climate neutrality by 2050 at the latest, and set strong interim targets
- bold: member states would determine a shared minimum carbon price and coordinate measures to prevent production being moved to countries with weaker emissions rules
- cooperative: club membership would be open to all countries that introduce adequate climate action targets and measures.
A G7 climate club could build on the experience of the European Union. The EU already has an internal carbon market and will next year start imposing border levies on imported goods, based on the emissions generated in their production. The highest costs will be borne by exporters from countries that don’t have a carbon price or meaningful climate policy.
Scholz suggests G7 countries could negotiate similar arrangements to those of the EU. The G7 countries will consider Germany’s proposal at ministerial meetings this year.
Climate policy is a key priority for the Biden administration in the US, providing a window of opportunity for positive negotiations.
And there are already moves to set shared standards across the Atlantic. In October last year, the EU and the US announced they were working towards a world-first deal to restrict access to their markets for high-carbon steel.
What this means for Australia
Australia is widely seen as a free-rider in global climate efforts. While G7 member states have promised to cut their emissions by about 50% this decade, Australia has pledged only to cut emissions by 26-28% from 2005 levels.
At last year’s COP26 climate conference in Glasgow, Australia was the only major developed country that refused to set a stronger 2030 emissions target. It’s also the only country in the world to have repealed a carbon price.
What’s more, the Morrison government is promoting a “gas-fired” economic recovery from the COVID pandemic. It continues to promote coal and gas exports, and derides the EU’s carbon border levies as protectionism.
Safe to say, if a G7-led climate club formed in the near future, Australia would not be invited to join.
Australia should take Germany’s climate club proposal seriously, and move quickly to implement climate policies that bring us in line with G7 nations.
Otherwise, Australia faces the prospect of economic harm. This would not just come in the form of potential carbon border levies, but also a loss of both investment capital and the economic gains that come from being a first mover in clean industries.
Staying in the race
The climate club concept is not without its detractors. Some academics and climate negotiators caution that it could undermine multilateral cooperation in UN climate talks, while others warn such agreements can exacerbate equity issues between richer and poorer nations.
For its part, Germany has suggested climate finance could be provided to help developing countries become club members, and club members could make a phased policy transition.
The proposed G7 climate club marks a major shift in global efforts on climate change. Major powers now view climate action as a race for competitive advantage. The first movers in the new industrial revolution will take first, second and third prize.
If Australia wants to stay in the race, much more ambitious federal climate policy is urgently needed.
Wesley Morgan, Research Fellow, Griffith Asia Institute, Griffith University
This article is republished from The Conversation under a Creative Commons license. Read the original article.
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Six of the G7 countries are members of the NATO club. The dues for the club is to have a 2% of GDP defense spend. Three of the G7 countries in NATO are paying their club dues. Canada, Gemany and Italy are not among those meeting their obligation. It is apparent that these three countries know all about “free-riding”. Can you say duplicitous? I knew you could.
Canada, Germany, and Italy aren’t planning on using their military to intervene anywhere or even defend themselves….their economies highly dependent on tourism and immigration, they are basically constantly under invasion by foreigners and apparently OK with it….but like to be members of the NATO gun club for the social occasions.
Four of those countries. USA, Greece and the UK have exceeded the 2% threshold (by a small amount for the UK, larger for Greece and USA) whilst Poland is spending exactly 2% of GDP. All of the other countries are spending far less.
I’m sure OZ is in full panic …Chicken little is a threatening little foul
He’s a foul fowl.
I would suggest a boot camp for politicians (lock them up three weeks in a classroom) to learn the real science behind all this, and detoxify them from all this CAGW nonsense…
although probably some of them know about it, but the narrative is more attractive.
Germans are getting into their heads again that they’re the Master Race and know what’s good for the rest of the world.
Stop talking bullshit. Germans, as all European nations are not free people whose opinions matter. They are subjects of the Union of European Socialist Republics. They are ruled by pan-European beurocratic elite, who has no nationality. This is miles away from 30s.
The Germans. There is a reason they love Wagner’s music and Gotterdammerung/Ragnarök.
Ahh….Threats.
And the level of carbon (dioxide) in the atmosphere is unimportant.
Jim Jones founded a club just like this. Didn’t end well.
Will the club members ride motorcycles and wear matching leather jackets?
Given that the UK and Germany are already destroying their economies and impoverishing their citizens with tyrannical green laws, I can’t see this idea making much headway in reality.
Isn’t Germany becoming less green itself? More coal and gas as they shut down nuclear?
Is this delusion, like in the past where the villain with the mustache looked at a map and figured he could easily control the whole work, because of innate superiority?
Is this just a case of misdirection, distract people from looking at them?
The climate club, join the climate club or get clubbed. Or is it a clique that dominates with personal interests. What ever they call themselves they are exerting power in support of a fraud without asking the people.
Given the existing tensions within the bloc, this might rip the whole thing apart. Going too far, too quickly is likely to cause many member states to look to an exit strategy rather than closer ties.
German leaders talking about punishing other countries should raise alarm bells. They have a spotty record in that regard.
Australia stood up to China, one of their biggest trading partners, about human rights and aggression against its nearest neighbors. What makes Germany think being a member of the climate club will have any influence over Australia’s domestic policies?
Bing. We also didn’t mind upsetting the French over $90B worth of subs but Germany thinks we will give a toss what some third rate trade partner wants?
Good point.
Australia should tell the German politicians to go pound sand.
Austrailia does not need advice from German politicians who are in the process of ruining their own country over CO2. Australians should refuse to be as stupid as German politicians.
It seems a little odd to claim Australia is a free rider, considering that Australia was one of the few nations to meet or exceed its Kyoto and Paris reductions.
As Inigo Montoya said in “The Princess Bride”, “You keep using that word. I do not think it means what you think it means”
Will Germany be on a list of leading economies in another decade?
If they keep going the way they’re going, no.
I am, I have to say, highly suspicious of plans bruited by Germany to make people march in lockstep with their thinking. This whole Climate Change swindle brings out the fascists in a lot of governments.
sounds like this climate club has a nail in the end.
The carbon club will be the end of the western empire. While we are preoccupied with virtue signalling, the cost of production will skyrocket. Nations outside the club will produce goods for a fraction of the cost and price out whatever industry is left in the west. If we’re looking at a strategy of promoting growth in low income countries, this is a wonderful way to achieve that.
How would he feel about a Medicine Club, where countries like Germany pay for the advances in medical techniques and pharmaceuticals developed in the U.S.?
Australia is irrelevant. There won’t be a carbon club, because Biden won’t have the authority to order out for pizza after this fall’s elections.
Besides, the real issue is China, and we know that Germany will roll over and stick its paws up in the air to keep China happy.
Now all people, including academics, need to know what exactly is “net zero”. Net zero includes all emissions and sequestrations, including native forest, mangroves etc, not just forest plantings. 🙄
Sounds more Ike a race to the bottom club..
This is the sort of thing I have been worried about – co-ordinated action by the wealthy club to bully, intimidate and sanction non members into climate austerity. Fortunately, the wealthy club soon won’t be wealthy, and will cease to have any real impact on the rest of the world, who will carry on with whatever they deem best for their countries.
We will get plenty of investment capital from China. They take plenty of our high quality coal and get cheap reliable energy which will be the basis of their becoming the worlds leading economy and military power. They don’t fall for pseudo science backed by unvalidated, proven wrong computer models.
Given that the Labour Party in Australia currently has a 12 point lead on the two-party preferred vote, are things about to change, anyway? The Australian Labour Party seems to have a policy on climate change which is very different than the current government’s policy
https://pursuit.unimelb.edu.au/articles/labor-s-climate-policy-puts-australia-in-the-race
I note that the article states that the Labour Party are promising lower electricity bills. Good luck on that one.