Climate talks highlight shortcomings in global efforts
Governments are striving to demonstrate their commitment to tackling climate change, but efforts are still insufficient
A virtual Climate Leaders’ Summit convened by US President Joe Biden on April 22-23, rebooted climate diplomacy after an interrupted 2020 and marked the return of the United States to the forefront of efforts to mitigate global climate change. Washington has re-joined the Paris agreement and announced new climate commitments, but still faces a credibility gap. It must demonstrate by November’s COP26 summit, how it can meet its new goals.
What next
Developing countries emphasise the need for increased and more accessible climate finance, but also broader support for pandemic economic recoveries. The G7 summit in June will be a moment for donor countries to unveil new plans, especially on debt relief and concessional finance, to alleviate fiscal crises and enable climate-friendly investments. The UN estimates that the vast majority of pandemic economic recovery spending has not been in environmentally sustainable areas.
Subsidiary Impacts
- Private sector companies will face increasing pressure to set net-zero targets.
- The use of natural gas as a transition fossil fuel will face greater scrutiny as pressure for drastic climate action increases.
- Fossil fuel subsidy reform is likely to return to G20 priorities after having been neglected during the US Trump administration.
Analysis
The International Energy Agency (IEA) projects that global emissions will increase by around 5% in 2021 -- one of the largest ever year-on-year increases -- bringing them back to near-2019 levels, after a pandemic-induced fall of 5.8% in 2020 (see INTERNATIONAL: COVID-19 climate impact may be brief - March 27, 2020). Considerable uncertainties remain in this forecast due to variables such as pandemic responses around the world, the pace of vaccine rollouts, and the extent to which air travel rebounds (see INTERNATIONAL: Developing nations risk a weak recovery - March 26, 2021).
5%
Projected increase in global emissions in 2021
New pledges
Last week's summit saw several major economies update their 2030 emission-reduction pledges, but precise details of the policies that underpin their targets are still lacking (see PROSPECTS 2021: Climate change - November 25, 2020). Countries have also chosen different years as baselines to report pledges, aiming to portray their efforts in the most favourable light possible and making comparisons with other countries more complicated:
- Japan's pledge is now a reduction of 46% below 2013 levels (previously it was 26%);
- the United Kingdom's pledge is now 68% below 1990 levels (previously 65%); and
- Canada's pledge is now 40-45% below 2005 levels (previously 30%).
South Korea will end support for overseas coal development (see SOUTH KOREA: Odds are against hitting 2050 carbon goal - November 5, 2020), while the United Kingdom will include international aviation and shipping emissions in its national carbon budget framework. These are not normally covered in national pledges due to disagreement over how to allocate emissions to different countries. This move may prompt other major economies to follow suit.
Australia made no overall change in its target, instead focusing on new funding for carbon capture and storage, and hydrogen, but these are not mature technologies, and their decarbonising implications are uncertain.
US efforts
The headline US pledge is to cut emissions to 50-52% below 2005 levels by 2030. This is a substantial improvement on the Obama Administration's 2015 pledge to cut to 26-28% below 2005 levels by 2025. The new target nevertheless still amounts to a reduction of just 43% since 1990, falling short of goals announced by the EU (55%) (see EU: Brussels is ramping up its climate legislation - January 14, 2021) and the United Kingdom (68%) on the same baseline.
Some of the underlying policies to achieve these goals have already been outlined by the Biden Administration in its infrastructure plan proposals. These address key emitting sectors, pledging, for example, USD174bn of investment in the electric vehicle sector, and setting the goal of reaching a fully carbon-free electricity sector by 2035. Climate-related spending accounts for up to half of the government's proposals, which amount in total to some USD2.3tn.
However, the proposals are still subject to thin majorities held by Biden's Democrats in Congress. The medium-term political context, including the 2022 mid-term elections, increases uncertainty surrounding the administration's ability to advance follow-on measures in areas such as agriculture and standard-setting mandates. The prospects of a federal carbon price, whether through a carbon tax or cap-and-trade scheme, still look bleak.
The administration had earlier announced a USD1.2bn commitment to the Green Climate Fund (GCF), but this falls short of the USD2bn Obama-era pledge that was discarded by former President Donald Trump (2017-21). With European countries having doubled their contributions in last year's replenishment round, the United States will be expected to make further GCF commitments within the next year.
The United States announced new climate finance efforts at the summit to double its public finance commitment to developing countries (currently around USD2.8bn per year) through channels other than the GCF by 2024, and to triple the share allocated to adaptation finance (USD500mn). These commitments also fall short of other donors' efforts, however. It remains unclear whether the United States will continue to support foreign gas projects.
The summit was preceded by climate envoy John Kerry's Asian tour, which saw a US-Chinese statement affirming both countries' commitment to cooperation on climate change. This was a major shift, at least in tone, from Trump-era approaches. Whether the countries can compartmentalise climate cooperation, and keep it separate from other areas of bilateral tension and rivalry, will be an ongoing question.
Secretary of State Antony Blinken has emphasised renewable energy investment as important in helping to deliver domestic jobs and fulfil climate promises, but also in ensuring that the United States does not fall behind China economically. China's dominance in global solar manufacturing makes any rapid scaling-up of renewables capacity almost impossible to achieve without reliance on Chinese industry.
The United States is also renewing diplomatic engagement with Brazil on environmental matters. Brazilian Environment Minister Ricardo Salles has called for international financing of USD1bn a year to support anti-deforestation efforts.
There are nevertheless major doubts over the Brazilian government's commitment to addressing the issue. It has expanded agricultural land conversions, hollowed out environmental agencies, and dismantled a previous Amazon Fund, to which Norway and Germany contributed USD1bn over a decade. Within hours of promising to boost spending on tackling deforestation at last week's summit, President Jair Bolsonaro approved a cut to the environment ministry budget.
China plans
China did not make any substantial new announcements at the summit, but Beijing has developed a tendency in recent years to make major announcements independently to advance its own climate leadership claims; it made its pledge to achieve carbon neutrality by 2060 at last year's UN General Assembly (see CHINA: 2060 goal could change climate outlook - October 20, 2020).
President Xi Jinping did suggest coal use would decline after 2025 -- a seemingly positive development, but one that will do little to ease concerns surrounding China's latest Five-Year Plan, which does not rule out the continued construction of new coal power plants. China has previously stated intentions to reach peak carbon emissions by 2030, but quantitative targets have been lacking. The IEA expects that China will account for over 50% of growth in global coal demand in 2021.
>50%
China's share of the growth of global coal demand in 2021
China's much-anticipated national carbon trading scheme is now online. This brings some 16% of global emissions within an emissions trading scheme (from 9% previously). The scheme imposes relatively light costs, does not have an overall cap, and only covers the electricity sector for now. However, it is likely to become more demanding.
