Welcome to the Era of Competitive Climate Statecraft
In trade, finance, development, and security, governments are racing to get closer to net-zero.
2020 wasn’t only the year a pandemic hit the world; it was also the second hottest in history. Regions around the world faced wildfires, droughts, severe weather, and much more. The magnitude of the COVID-19 challenge should have brought nations together to cooperate and coordinate action. However, in many cases, the varying and shambolic responses illustrate the global system’s dysfunction when seeking to respond to a worldwide crisis. Will climate change be a different story?
Climate has moved from a lower-rung priority to a top-tier one—ushering in a new era of climate statecraft. What this means in practice is how countries employ a climate-driven agenda around trade, finance, development, and national and international security, as well as the tools of state management. Even the two carbon hegemons—the United States and China—are taking bolder climate action. The United States, China, and the European Union account for over 50 percent of all global carbon emissions. The decisive acceleration in national climate pledges means most of the world’s big economies now have net-zero emissions targets in place. To achieve these ambitious targets, both domestic policies and foreign policy will have to change. Climate statecraft is becoming a centralizing force for many countries.
China, Japan, South Korea, and over 100 other countries have pledged to be net-zero or net-neutral in the next 30-40 years. The United Kingdom and EU stand united on addressing climate change, even after a rough breakup. It is hard to imagine another time in history when so many countries, regardless of regime type, all shared a common target. This should beckon convergence in cooperation and coordination to address the shared global threats of climate change, but national pathways will be different, and what may unfold is a global power play. The race to net-zero will unleash a new stage of energy and clean technology competition, especially between the United States and China—competition that could prove beneficial in moving decarbonization forward beyond their own borders.
The EU has set the bar high with its ambitious climate plans: Europe’s own Green Deal, committing to economic growth decoupled from resource use and moving toward a circular economy, where waste and pollution are designed out of products and materials. Around 30 percent of the EU’s $880 billion COVID-19 stimulus plan is dedicated to climate-related measures such as building renovation for energy efficiency, clean energy technologies, low-carbon vehicles, and sustainable land use. Europe has also made investments in renewable energy, energy storage, clean hydrogen, batteries, and carbon capture and storage.
However, as a new administration begins in Washington, the U.S.-EU relationship is already frayed. Although the recent agreement in principle on the EU-China investment deal could pose obstacles to trans-Atlantic cooperation, rapprochement and cooperation around climate is an area where the United States and Europe share common ground and interests. The Biden administration is recalibrating a new set of objectives to move the climate agenda forward. U.S. President Joe Biden’s climate plan calls for over $2 trillion in new spending and includes decarbonizing the electricity sector by 2035 and the economy by 2050. On domestic policy, this represents a radical shift away from former President Donald Trump’s push for U.S. energy dominance, which translated into support and deregulation for oil, gas, and coal producers.
The U.S. government along with the private sector can unleash and harness an effective ecosystem to support advanced innovation, build employment opportunities in the burgeoning renewable energy and climate space, and further the competitiveness of its high-tech clean energy sector. The challenge is not technological availability—though the deficits remain great, especially in funding new clean energy technology to scale—but gathering the political will and economic support to move forward. Both will be necessary to reach requisite levels of clean energy building and innovation, industrial upgrading, efficiency integrations, and transmission additions to form a competitive positioning point for the United States.
With regard to foreign policy, Biden is explicitly forging an administration where climate mainstreaming will become the new normal: Climate change must be accounted for when designing, implementing, and evaluating policies, programs, and projects. On day one as president, Biden rejoined the Paris agreement, one of his first executive actions, with a promise to put the United States out front on climate. Sending a signal to the fossil fuel industry and starting on his campaign promise to transition the United States away from oil and gas, Biden revoked a permit for the Keystone XL pipeline issued in 2019, paused new oil and gas leases on federal lands, and will apply a more rigorous review of the existing federal oil and gas programming.
Biden’s cabinet choices illustrate how climate will be central to the administration’s national and international security decisions, pledging a “whole-of-government approach to the climate crisis” encompassing 21 departments and agencies. Former Secretary of State John Kerry serves as the country’s first climate envoy and holds a special seat on the National Security Council. Climate cabinet positions do not stop at the National Security Council; Biden has put in place the personnel architecture for change at both the state and federal levels. If their very first announcements and executive actions are any indication, the Biden team plans to put political power toward decarbonization. Several states are already well on their ways to greening their grids; the top three wind-powered states are Texas, Oklahoma, and Iowa, and North Carolina, Florida, Texas, and Arizona are four of the top five solar-electricity-producing states.
One major question, however, is how the United States will work with China. China is a bit like Jekyll and Hyde when it comes to climate change. It is the world’s largest emitter of carbon emissions, while also leading in the production of technologies to address climate change. Its 2060 net-neutral pledge will require an absolute overhaul of its current energy system. China, like the rest of the world, will need to decouple its growth away from fossil fuels. To decarbonize and meet new targets for carbon emissions, China’s focus is on research, development, investments, and regulations to support new energy technologies and materials, such as batteries, carbon capture and storage, electric vehicle support, and nuclear energy deployment.
China is not holding out for an improved relationship with the United States; rather, it seeks to advance the state’s role in the economy beyond the control it currently exerts, and it aims to develop strategic technologies. Two terms being used within China’s 14th Five-Year Plan, which spans 2021-2025, are “technological independence” and “indigenous innovation,” suggesting China is looking to challenge dependence on imports to achieve decarbonization while at the same time bolstering its position as a major exporter of advanced clean energy technologies. The Belt and Road Initiative, China’s massive international infrastructure investment project, is another focus, creating a Silk Road with green energy. China is leveraging its already well-tested economic statecraft into competitive climate statecraft, which it can use by manufacturing and selling the green technology the world needs to meet all its net-zero pledges.
For the United States, achieving large-scale cooperation with China is unlikely, especially when decoupling policies are at play on both sides. Beijing and Washington have now made climate a central part of their future domestic and international playbooks, while embarking on different and competing technological pathways. They will compete on developing the scale and scope of new energy technologies required for deep decarbonization. The increasing competition may turbocharge solutions and enable a collective benefit through investments in new technologies and deployment.
Climate change, an existential crisis, has already unleashed and exposed risks and sudden shocks around the world. Cooperation and coordination are of course necessary and required to address the urgency of the challenge, but it can also be argued that pragmatic competition will accelerate dynamic and innovative low-carbon pathways forward. A mixture of cooperative and competitive climate statecraft may prove to be the greatest chance of mitigating the effects of climate change.