Climate change mitigation within a faltering world order – setbacks avoided, breakthroughs postponed
The German Government had set itself challenging goals for the G20 Summit, developing an ambitious agenda for shaping an interdependent world. The fundamentals of this agenda had already been established when everyone was still expecting Hillary Clinton to succeed Barack Obama as President. But the new White House incumbent is a climate and cooperation sceptic. A man who sets himself up back home against the media, the scientific community and the judiciary, that is, against the entities that keep his power in check. And a man who is divisive on the international stage, favouring protectionism where it serves US interests, withdrawal from the Paris Climate Agreement and a reduction in contributions to the United Nations. A fickle world power that causes offence rather than working with partners to shape global policy. This is no coincidence.
In fact, Trump announced time and again in his election campaign that this was his strategy for weakening the multilateral system, with his advisor Stephan Bannon providing the overarching ideology: America first. And we saw that this was more than just words at the NATO meeting and then at the G7 Summit in Italy, both in late May, as the President adopted the role of blusterer and global policy macho man, issuing a stern rebuke to everyone else. This did not bode well for the G20 Summit. There was great concern that Trump might form flexible alliances with other autocrats, such as Putin and Erdogan, who also take more of a tactical approach to multilateralism. The worst case scenario at the G20 Summit would have seen Trump announce that the United States would levy a 30% import duty on steel and him call for a review of financial market regulations, which have been improved in recent years, because they restrict the scope that banks and investment houses have to act. It would also have seen him join Putin, the King of Saudi Arabia and perhaps also Erdogan and the Indonesian President in calling the Paris Climate Agreement into question. The G20 would have become a shambles, leaving in its wake a “G0” situation in which cooperation were no longer possible.
With this in mind, the Hamburg summit was about the big picture, rather than the details, that is, on the basic ideas of multilateralism, a rule-based economy and the stabilisation of the climate and planetary system. So, what should we make of the outcome?
The good news is that those sceptical of cooperation were contained and held back and that setbacks were avoided. Formal compromises were reached on global trade, but without opening the floodgates. Financial market regulation was not called into question. Supporters of the Paris climate deal outnumbered opponents by 19:1. Good news, as this was no foregone conclusion. Some parts of the G20 final declaration emphasise key topics of the future such as cooperation with Africa, the fight against pandemics, protection of the oceans, support for female entrepreneurs, cyber security and digitalisation. And, crucially, those who would challenge multilateralism did not form an alliance. The summit was not shaped, pressurised or lectured to by Trump, Putin and co (as the NATO meeting had been by Trump). Instead, it was those wishing to push ahead with shaping the globalisation process who retained control and influence over future policy: Chancellor Merkel, the Europeans, the new generation of the Macrons and Trudeaus. Cooperation with Japan and the emerging economies was also important in this regard. At the end of the day, the countries voted 19:1 in favour of climate change mitigation. Trump and Putin can slow down every possible process for shaping globalisation at the moment, but they could not blockade or dominate the summit. If necessary, the process of shaping globalisation can continue (for a while) without Trump and co. Maybe their opposition will even spur everyone else on.
The final verdict: setbacks successfully avoided. However, this was no act of liberation or a breakthrough on the road to creating fair and inclusive governance structures and solutions for world problems in a globally connected world. The formal compromises on trade and the 19:1 on the Paris deal aside, the conflicts were covered over by the wide range of detailed proposals found in the final declaration and other working documents. This is no bad strategy, as all of these areas represent relevant issues of global interdependency which must be addressed comprehensively in future. This is something that even Trump and others have recognised. But there was no more time time at the Hamburg summit for one or two substantial, lasting beacon initiatives (such as a significant increase in funding for the Compact with Africa), which could have served to show the willingness of the majority of G20 countries to take decisive action and demonstrate how and the enormous momentum with which the globalisation process will be shaped in future.
The limited room for manoeuvre at the G20 summit in Hamburg also becomes clear with regard to climate change mitigation. The 19:1 result in favour of the Paris Climate Agreement is one positive vote more than many observers had expected, but still one too few to properly solve the issue of climate change. Think 20 (a coalition of research institutions from G20 countries), the German Advisory Council on Global Change (WBGU) and the OECD had published studies showing for G 20 leaders what the key points of a G20 action plan should look like if climate change mitigation is to be turned into a justice, innovation, and modernisation project for the global economy: peak emissions must be reached by 2020 and greenhouse gas emissions must be reduced to more or less zero by 2050. For this to succeed, we would need to achieve a carbon price of around USD 40 and abolish global subsidies for fossil fuel combustion by 2020. Additionally, the G20 countries would need to support the existing dynamic trend in renewable energy investments with plans for phasing out the use of coal. Global infrastructures will also double over the next three decades, especially in urban areas. In addition to energy, the main focus here is on mobility systems and buildings. These investments must be climate friendly in order to limit global warming to below two degrees Celsius and avoid tipping points in the planetary system. The T20 and the WBGU have also put on the table proposals for how climate change mitigation can at the same time help to correct social imbalances in our societies. A proportion of the revenues from greenhouse gas emissions taxes could be paid out directly to the lower 40% of the population or used in active labour market policy. Consequently, there remains much to be done in areas in which the G20 has not (yet) pushed changes through.
All of these items will be back on the agenda during the next round of climate negotiations in Bonn in November of this year. As a result of the G20’s 19:1 decision, the Paris Climate Agreement has been defended, stabilised and reinforced. Real climate change mitigation efforts must now be continued, scaled up and accelerated in many other areas. The good news is that, while states are struggling to adopt and push ahead swiftly with an integrated approach to climate change mitigation, economic modernisation and social development, many other actors are taking decisive steps forward on this front. For some time now, numerous cities, regions and companies, including many in the United States, have been leading the way on climate issues. The research community is providing strategies, data, points of reference and proposed solutions, not least through Think 20. And on 5 July, 400 global investors, who manage a total of USD 22 trillion, equivalent to around one quarter of global gross national product, announced to the G20 their intention to make a massive contribution to the decarbonisation of the global economy and the implementation of the climate agreement. They are calling for an appropriate price for greenhouse gas emissions and for acceleration of efforts to restructure global energy systems, gearing them towards renewables. In the 21st Century, global policy is no longer made by states alone, and that is a good thing. Nonetheless, it is not possible to make sustainable progress without states and their ability to establish political order and create incentives. As such, the G20 needs to continue its work. It is due in part to the Hamburg summit that it can do so. Setbacks have been avoided, but breakthroughs have been postponed for now.