Triggering a Climate Alliance with a nuanced effort sharing

A post by Michele Stua (Scuola Superiore Sant’Anna di Pisa)

The German Government has recently launched an ambitious proposal for international climate change governance. A first document by the German Ministry of Finance (August 2021) suggested “an Alliance for climate, competitiveness and industry” meant to build “blocks of a cooperative and open climate club”. Germany further promoted and defined the proposal in the text of its G7 Presidency Agenda (January 2022), with the first point of the document’s overview calling for the “establishment of an open and cooperative international climate club” to “progress on climate protection”.

The German document clearly stated that the “climate club’s objective is to accelerate the implementation of the Paris Climate Agreement” also by adopting “common measures for supporting countries that implement ambitious climate protection measures”.

The apparently appealing proposal has encountered at least two lock-ins to date:

  1. G7-based proposal. Whilst Germany tried to emphasise the inclusive and open structure of its proposal, several low- and medium-income countries perceived this as just a G7/OECD-centric instrument meant at holding control on the global political and economic dynamics. This perception has been further motivated by a limited, if not null, inclusion of the G20 in the Alliance’s discussion so far. Most likely due to the geopolitical tension between most of the G7 members and Russia, this lack of engagement in the Alliance’s discussion led G20 countries to become distrustful towards the initiative since its very beginning.
  2. Common measures. Identifying common measures to be applied to the Alliance represents the key element for its effective implementation. These measures should in fact represent both the Alliance’s foundation and its attraction’s rationale. In other words, adequate common measures should define the pillars to guarantee the Alliance with accountability and stability over the decades. At the same time, these measures should provide the Alliance’s members with sufficient reasons to participate.

Besides breaking the lock-ins presented in point (2), a solution to the common measures’ challenge may strongly contribute to dissolving the lock-ins included in point (1). Defining a list of priorities for the Alliance represents a fundamental step to identify its required measures. The Alliance’s list of requirements comprehends:

  1. To guarantee aggregate carbon neutrality on a jointly agreed deadline;
  2. To offer climate justice for all its members based on the principle of Common But Differentiated Responsibilities and Respective Capabilities (CBDR-RC);
  3. To agree on WTO-compliant joint rules;
  4. To protect its members’ socio-economic interests;
  5. To demonstrate transparency and environmental integrity.

Given the Paris Agreement’s general objective introduced in Article 2, carbon neutrality represents the natural objective for any Climate Alliance. All its members shall aim at reaching carbon neutrality at a jointly agreed deadline. The Alliance may follow two pathways to keep its objective aligned with the Paris Agreement: a) an ‘Article 4 option’ (based upon the concept of Nationally Determined Contributions – NDCs); and b) an ‘Article 6 option’ (based upon the concept of voluntary cooperation for higher ambition). While a mere sum of NDCs appears unable to guarantee full correspondence with overall carbon neutrality requirements, a carefully crafted ‘Article 6 option’ may bridge this gap. Therefore, the Alliance may adopt the Article 6 concept of voluntary cooperation for higher ambition, by calculating a single ‘plurilateral effort’ and distributing this between the members. The distribution system is hereby defined as Effort Sharing.

Given the need to reach aggregate carbon neutrality, the hypothetical Effort Sharing shall become the key implementation tool for the Alliance’s ambitions. Yet, an adequate Effort Sharing should satisfy the second key requirement for the Alliance, being structured on a ‘nuanced’ basis. Effort Sharing shall guarantee climate justice and CBDR-RC within the Alliance in the short and long term, hence becoming a required tool to attract and consolidate heterogeneous memberships. In fact, neither climate justice nor CBDR-RC should recall (only) protection to least developed areas, providing instead socio-economic support to anybody. By stating that carbon neutrality ambitions must be paired with strategies “ensuring that no one is left behind” the European Green Deal well represent this concept. The Alliance should incorporate the ‘no-one-left-behind’ principle as an ideal interpretation of climate justice and CBDR-RC by adopting a dynamic, technical Effort Sharing.

With Effort Sharing defining the mitigation pathway from the Alliance’s foundation till the achievement of aggregate carbon neutrality, a WTO-compliant joint rule for the Alliance would be established. In fact, this pathway would comply with Article 20(g) of the General Agreement on Trade and Tariffs (GATT), and allow the Alliance to implement norms to protect its members’ socio-economic interests. These norms would include, without being limited to, the implementation of a legally compliant Border Carbon Adjustment Mechanism (BCAM).

Finally, if properly designed and adopted by the Alliance, a technical and dynamic instrument for Effort Sharing would provide full transparency to the members’ implementation of their assigned tasks, hence potentially guaranteeing their environmental integrity.

To conclude, the ideal Effort Sharing complying with the listed requirements should hold a structure whose duration would correspond to the entire timeframe defined by the Alliance to reach its joint carbon neutrality.

This blog post is based on the following documents:

The views and opinions expressed in this post are solely those of the author(s) and do not reflect those of the editors of the blog of the project LIFE DICET.