Ottmar Edenhofer is Director of the Mercator Research Institute on Global Commons and Climate Change (MCC) in Berlin.
(Photo: dpa)
The expectation of the World Climate Conference is enormous – it should be a turning point. Despite all the negotiations and reports of the Intergovernmental Panel on Climate Change, greenhouse gas emissions have risen steadily in the two decades up to and including 2019. However, they have to be reduced to zero by 2050, i.e. in just 29 years, if the global community still wants to achieve the goals of the Paris Agreement: Six years after this historic determination, the long overdue trend reversal is now to come.
But the omens under which the Glasgow Conference stands are not encouraging. The recovery of the global economy after the Corona dip in 2020 has pushed emissions to a new high. The prices for the somewhat less climate-damaging fossil fuel natural gas are rising faster than coal prices because the demand for gas in Asia has grown enormously and Russia is currently unwilling to meet the additional demand.
This will make coal-fired power plants more profitable again. You have to know that if the coal-fired power plants that are in operation and under construction around the world run for as long as the investors planned, they will consume the entire carbon budget of mankind, which is compatible with the 1.5 degree target. In addition, the unexpected rise in energy prices makes climate protection politically more difficult. It fuels inflation and endangers confidence in the development of prosperity – no wonder, after all, the oil price shock of 1973 burned itself into the memory of the western world as the beginning of a long-lasting stagnation.
Although the current bottlenecks could be overcome in a few months, they are already being used as an argument to delay the implementation of the EU Commission’s European Green Deal. Research shows that a credibly announced increase in prices for CO2 emissions and thus for the use of fossil fuels need by no means cost economic growth. Consumers and companies do not react to such expected price increases with reluctance to invest, but are increasingly investing in energy- and emission-saving technologies.
In the run-up to Glasgow, governments reinforced their climate protection commitments. With its Green Deal, the EU wants to reduce emissions by 55 percent below 1990 levels by 2030, and the US even wants to halve them compared to 2005. Together, they account for 23 percent of all emissions. Other major emitters are still reluctant. China is suggesting that it will peak before 2030 and reduce greenhouse gas emissions to zero, at least for CO2, by 2060.
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If one adds up the declarations of intent of all countries in the world, the global mean temperature would rise by 2.7 degrees compared to the pre-industrial level. That would be less than before the recent announcements that emissions would be falling, but still too slow to zero by 2050. In addition, these have so far been non-binding declarations of intent, so far emissions have continued to rise.
A success is likely to be achieved in Glasgow with climate finance: The financing commitments made for the future by the richer to the poorer countries for the climate-friendly restructuring of the economy will be kept with 100 billion dollars per year. That was in doubt for a long time. Another topic is likely to burden the summit: In addition to support for the restructuring, the poorer countries also expect compensation for climate damage, since in the past this was mainly caused by the rich countries through the burning of coal, oil and gas .
In order to make global climate protection cost-effective, Glasgow should promote the topic of “common carbon markets”: in these countries countries should be able to come together and then reduce emissions in those regions and sectors where it is cheapest. A milestone after tough struggle would already be the adoption of a set of rules for such carbon markets that avoids double counting of emission reductions and creates transparency.
Overall, the 26th World Climate Conference can at best achieve diplomatic successes – and not a breakthrough. The diplomacy process created in 1992 with the Framework Convention on Climate Change should therefore no longer be overloaded with expectations that it cannot meet. Without stalling the process, international climate policy should now create another negotiating format. There is no other way humanity can do justice to the climate crisis.
Following the big announcements of late, China, the US and the EU could negotiate trilateral minimum carbon prices. And beyond that, countries that still rely on coal, such as Vietnam, Indonesia or Bangladesh, are helping to build a fossil-free energy system – through low-interest loans or grants from an investment fund into which other countries can also contribute. In return, the recipient countries would undertake to phase out coal and introduce their own carbon pricing.
It would be worthwhile for Russia to join this club in the long term. The country knows that the European Green Deal will reduce gas demand. If it raises a CO2 minimum price for its own economy and can thereby avoid the EU charging Russian exports with a CO2 price, a lot of money ends up in the Russian finance minister’s coffers instead of the European finance ministers.
The export of climate-neutral hydrogen could also create incentives for Japan to raise a minimum price. Negotiations with India, on the other hand, are likely to be difficult – energy generation there is in state hands, jobs and political power depend on coal. However, India is dependent on exports, which would become more expensive through a border adjustment. Sooner or later, the subcontinent is likely to become more flexible when it comes to the issue of the minimum CO2 price.
Such multilateral negotiations parallel to the classic world climate summits may still sound like a long way off. But the damage caused by climate change is becoming increasingly noticeable – and international cooperation is therefore more urgent. It could make a significant contribution to the fight against global warming. China, the US, the EU, Russia, Japan and India are responsible for two thirds of global emissions.
The emerging traffic light coalition in Berlin knows how to properly classify its own climate policy ambitions. It will only bear fruit if the European Green Deal is implemented and a resilient global agreement is reached between the major emitters. Only then can competitive disadvantages for our economy be avoided in the long term.
Germany has to throw its European and global political capital into the balance in order to form a climate club that shows its effect in coordinated minimum prices. The next G7 summit in early summer 2022 in our own country would offer a suitable forum for such a German foreign climate policy. In view of the global climate and energy crisis, it is high time to drill this thick board.
The author: Ottmar Edenhofer is director of the Mercator Research Institute on Global Commons and Climate Change (MCC) in Berlin, director of the Potsdam Institute for Climate Impact Research and professor for the economics of climate change at the TU Berlin.
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