Biden's climate summit brings some ambition boost but no true U.S. climate leadership

Analysis

With the two-day Biden leaders' summit on climate attended by 40 countries, the United States has returned to the international stage of climate diplomacy. Whether the increased ambition of new climate action pledges via video made by several core countries can be implemented in a binding manner, however, remains an open question - not only, but also including in the United States. An urgently needed signal that the Biden administration is prepared to take on a leadership role in international climate finance in the run-up to COP 26, however, was missing in action.

Teaser Image Caption
US President Joe Biden speaking at the Leaders Summit on Climate, on 22 April 2021.

The return of the Americans to the Paris Agreement was praised by the summit participants - without the participation of the U.S., which accounts for 15 percent of global CO2 emissions and is the largest historical emitter, achieving the Paris climate goals is almost impossible. However, it will take more than the new U.S. commitment to reduce greenhouse gas emissions by 50 to 52 percent by 2030 compared to 2005 as the most important milestone on the path to America’s climate neutrality by 2050 (a 30 percent increase over the Obama administration's annual reduction pledges in the first national commitment of 2015) to overcome skepticism, especially from developing countries, that the United States will keep its word this time. The non-ratification of the Kyoto Protocol under President Clinton in the early 1990s and Trump's withdrawal from the Paris Climate Agreement in 2017, both international climate agreements reached under pressure from and in some cases with extensive concessions made by other countries to the U.S., cast a long shadow over a climate leadership claim by the new U.S. administration. Especially since another reversal of U.S. climate action promises could come in four years, in case of a one-term Biden-Harris administration.

Specificity missing in new NDC

Yet even if the White House remained in Democratic hands after 2024, it is unclear whether the new U.S. climate target can be met. The updated U.S. nationally determined contribution (NDC) just submitted to the UN climate convention is eloquent and wordy, but not very specific, making no sector-specific commitments other than announcing plans to fully decarbonize the electric power sector by 2035. Instead, the NDC points to planned economy-wide implementation through an all-of-government approach under Biden, which has declared the integration and mainstreaming of climate considerations to be a mandate for all ministries and government agencies, and supports this, for example, in the so-called “skinny” initial budget proposal to Congress for the fiscal year 2022, with a request for additional funding of US$14 billion in discretionary spending on top of already planned spending amounts. The Biden administration, anticipating international doubts about the U.S. ability to implement the NDC, asserts that there are multiple strategies for achieving the U.S. goal. Common to all is a focus on creating good-paying, unionized domestic jobs and supporting greater environmental justice such as actions to reduce air pollution and target investments in often marginalized frontline communities of color.

How realistic is the U.S. reduction goal?

Experts disagree on how realistic delivering on the U.S. climate pledge is. On the one hand, the targets set by the Biden administration, unlike the reduction pledges of the European Union, which passed its climate law shortly before the Washington summit, or the climate legislation of Great Britain, are not legally binding. A corresponding U.S. law to European counterparts is also unlikely in the future, given the Democrats' razor-thin congressional majority and the Republicans' almost pathological blanket refusal to act on climate issues. This means that executive orders as implementation tools, such as those that President Biden has already announced he plans to take such as setting new fuel efficiency guidelines for vehicles, reducing fossil fuel extraction on federal lands, or Securities and Exchange Commission regulations to mandate corporations to transparently disclose climate risks, could be easily reversed by a successor administration. At the same time, it remains doubtful whether Congress will approve Biden's ambitious US$2 trillion infrastructure plan, the American Jobs Plan, which is the financial and political foundation of the implementation strategy for the new U.S. climate goal, at all or on the form submitted; a more likely scenario is that the plan will lose financial and climate weight in the scramble for some Republican support.

On the other hand, climate action at the state and local level alone could reduce U.S. emissions by 37 percent by 2030 compared to 2005 levels even without federal involvement, especially since numerous trends, such as an expected rapid increase in the number of new electric vehicles sold (which could reach  half of all new registrations by the end of the decade) or a tripling of the rate at which new wind and solar farms are built, could be almost irreversible. Biden's Special Climate Envoy John Kerry sees this transformation of the U.S. economy, which has already begun, as the best guarantee of U.S. NDC implementation success.

Are collective pledges enough to turn the tide on the climate emergency?

But is the new U.S. 2030 milestone on the path to climate neutrality for the U.S. economy by 2050, and the announcement at the summit by other industrialized countries of their intention to further increase emissions reductions by 2030, enough to trigger the momentum and collective surge of ambition in national commitments hoped for by the Biden administration between now and COP 26 in Glasgow in November? And are the new voluntary commitments enough to drive the needed global turnaround in emissions by 2030? An attempted first answer gives little reason for optimism.

Comparison of emission reduction pledges (NDCs) of leading industrialized nations / Source: Rhodium Group

True, Japan announced a sharper greenhouse gas emissions reduction of 46 percent by 2030 compared to 2013, and Canada also promised to reduce emissions 40 to 45 percent from 2005 levels by 2030. The EU had already updated its pledge the previous year to commit to reduce emissions in the 27-country bloc by 55 percent from 1990 levels by 2030. In the run-up to the summit, COP 26 host Great Britain also came up with a further pledge to reduce British emissions by 78 percent by 2035 compared to 1990 levels. The Johnson administration thus set another steep milestone for the country's voluntary commitment, which had only been formally submitted to the climate process in December 2020 with a promise of 68 percent emissions reductions by 2030 from 1990 levels. Added together, however, these new pledges only shrink the global emissions gap that must be closed by 2030 (i.e., the amount of global pollution reduction needed) to keep global warming still at 1.5 degrees Celsius, by 12 to 14 percent. Or, to put it another way, collectively, even with these new pledges (the fulfillment of which is not guaranteed), we as a community of nations are still miles away from meeting the goals of the Paris Agreement, which would require global emissions to be cut by 45 percent by 2030. Major polluter states such as Russia and Saudi Arabia, as well as Australia, sat out the Washington summit without new pledges, despite diplomatic pressure from the Biden administration.

America's lack of moral leadership

For a supposed U.S. leadership role in these global efforts, however, the new U.S. reduction targets—though significantly more ambitious compared to the first U.S. NDC—do not represent a real breakthrough by international standards, nor do they signal  a fair share U.S. contribution to addressing the climate crisis. Civil society groups would have liked to see a 70 percent reduction pledge by 2030 from 2005 levels domestically combined with additional massive financial support for climate actions in developing countries adding up to the equivalent of another 125 percent reduction in U.S. emissions. This would then be consistent with the 'common but differentiated responsibility and respective capability' of the U.S. as the historically biggest and economically most powerful global polluter, as stated in the UN Framework Convention on Climate Change as a core principle of international solidarity and corresponding commitments by developed countries to support climate actions by developing countries.

The U.S. cannot (at least so far) claim moral leadership in the international climate process vis-à-vis important emerging market and developing countries, even under Biden, as the Washington summit showed. China, India, Mexico or Indonesia made no enhanced reduction pledges. China's existing climate protection pledge to become climate neutral by 2060 continues to lack a milestone target, especially since the country, currently the largest global emitter of greenhouse gases, will not reach the peak of its emissions, which will continue to grow for years, until 2030. The only new concession made by Chinese leader Xi Jinping, who pointed out that China's path from peak carbon emissions to climate neutrality is much shorter than that of industrialized nations, was the declaration that he intends to reduce China's coal consumption starting as early as 2025, without, however, setting an end date for the complete phase-out of coal or the financing of coal-fired power plants internationally. India also fell short of a new climate change target or even an announcement on when it expects to reach its emissions peak, instead reiterating its intention to create 450 gigawatts of renewable energy capacity by 2030. While India is the fourth largest emitter globally after China, the U.S. and the EU bloc, the per capita contribution of an Indian citizen is less than one-seventh that of an American or only one-third that of an EU citizen, a fact India's leader Modi highlighted during the summit when he called for citizens globally to “go back to basics” by reduce their consumption for the good of the climate. And while Brazilian President Bolsonaro promised via video link to end the illegal deforestation of the Amazon by 2030 and to reduce Brazil's emissions by 50 percent by 2030, this reduction intention is not new and the credibility of his pledge for improved protection of the Amazon is low in light of record forest fires and a 12 percent increase in deforestation last year, followed by a cut in Brazilian budget funding for environmental and forest protection the day after the summit.

Developing countries call for more climate finance

At the same time, numerous government representatives from poorer developing countries and the small island states already hardest hit by climate change made clear how much raising the ambition of their climate pledges and their fulfillment depend on a concomitant massive increase in international climate financing pledges by the industrialized nations, especially for adaptation, which still receives less than a quarter of the funding amount for emission reductions. For such a significant upward financial leap, the generous re-engagement of the United States, which under Trump also left its international climate finance commitments unfulfilled, is indispensable. Most developing countries have dual-tracked their climate pledges in their NDCs, designating targets they can meet with their own financial resources but also specifying ambitious targets that are conditional on additional financial support from developed countries. It is already clear that without such new financing pledges from industrialized countries in the run-up to and at COP 26, the success of the entire process for raising climate protection ambitions is on the line. Especially as two UNFCCC finance reports due for COP 26 will show how far developed countries still are short in quantity and quality of financial support from from meeting the finance goal set in 2009 of providing US$100 billion per year for climate action by 2020, and how huge the gap is between this woefully inadequate pledge and the financing needs of developing countries.

Biden's climate finance plan: wordy but weak in finance commitments

Those who had hoped for such a clear climate financing signal from the Biden administration at the Leaders Summit on Climate were disappointed. The U.S. did submit a detailed International Climate Finance Plan in time for the global video convention. Among other things, it highlights the goals to increase the mobilization of private sector contributions and improve outcome measurement of public climate finance, as well as details efforts to make international financing flows more climate-compatible, but the impression which most stuck when reading it was its almost complete absence of possible financial support sums. Only a passage of text stating that the U.S. plans to double by 2024 its annual public climate financing to developing countries relative to the amount of public climate finance which was provided in the second Obama administration between 2013 and 2016, and to triple, as part of this goal, spending on adaptation, translates into dollars and cents at this time. Accordingly, by 2024, the U.S. under Biden would provide about US$5.7 billion annually, of which US$1.5 billion, or only about a quarter, would support adaptation. In comparison, Germany has been providing about €4 billion (about US$4.8 billion) per year since 2019 – currently expected to be stagnant. The United Kingdom plans to double its international climate funding over the next four years to £11.6 billion (about US$4 billion per year), but at the same time has announced significant cuts in its development funding.

Fair U.S. climate finance share

However, experts estimate that the United States and other rich industrialized nations would have to provide a multiple of these pledges in public grant funding each year in the current decade to still have a chance of limiting global warming to 1.5 degrees Celsius. This absolute financial minimum for achieving the goals of the Paris Agreement is far less than the sums cited in the discourse on a fair financial contribution by developed countries to address the climate crisis, which would include, for example, compensation payments to developing countries for already occurring unavoidable loss and damage from climate extremes as well as slow-onset threats as sea level rise. U.S. NGOs have calculated this fair share climate finance contribution for the United States. It would require the United States to provide at least US$800 billion in the current decade, which would then be shared equally for climate investments in developing countries in mitigation, adaptation, and payments for loss and damage. This could be paid for, according to U.S. climate activists, by reallocating current U.S. government support for fossil fuel infrastructure projects abroad and redirecting some US$200 billion in annual military spending.

In fact, Biden's new international climate finance plan calls for largely ending support for new fossil fuel projects both bilaterally through U.S. development finance agencies such as the Development Finance Corporation (DFC), the Millennium Challenge Corporation (MCC), or the Exim Export Credit Bank, and internationally through a mix of political pressure and consistent voting patterns on the boards of multilateral development banks, with the U.S. Treasury Department tasked to work on such guidelines. The U.S. also wants to create and enforce criteria for decarbonizing public support via export credit agencies in the Organization for Economic Cooperation and Development (OECD).  The potential effect of such U.S. political pressure was demonstrated at the summit, where South Korea positively surprised by promising to end all public financing for the construction of coal-fired power plants abroad. This undoubtedly raises expectations for Japan to perhaps follow suit with a similar pledge at the G7 summit in June.

Failure to settle U.S. debt to the Green Climate Fund

The White House also identifies the Green Climate Fund (GCF) as an important part of the U.S. international climate finance strategy for the coming years, specifically its role in adaptation finance and in using innovative financing approaches to mobilize private sector capital for climate investment. The GCF is seen by many developing countries as the most important multilateral implementation mechanism for the Paris Agreement. For many climate negotiators from the Global South, the scale of funding support for the GCF therefore also symbolizes how serious industrialized nations are about fulfilling their financial obligations to fund climate change efforts by developing countries. The Obama administration had supported the initial capitalization of the GCF in 2014 with a financial commitment of US$3 billion, but then only transferred US$1 billion. Under Trump, no additional U.S. money flowed into the GCF and only minimal contributions to other multilateral climate funds. This was one reason why, when Biden took office, expectations were high that the U.S. would not only pay down its GCF debt but, more importantly, match European countries and double its initial GCF contribution for the current replenishment round (in which the U.S. did not participate in 2019). But instead of the US$F8 billion for the GCF requested by U.S. groups, the White House budget proposal for fiscal year 2022 included only US$1.2 billion, although U.S. Climate Change Special Envoy Kerry had alluded to it in a recent event as a down payment. Quick further U.S. commitments to the GCF are critical, in part because negotiations for its second replenishment period will begin already late next year. Another US$485 million for other multilateral climate funds and US$691 million for the State Department and the U.S. Agency for International Development (USAID) for bilateral climate finance projects are requested in the budget proposal. While this is enough to allow the U.S. to have an unashamed say in international climate finance after four years as a pariah state, it is wholly inadequate to justify a U.S. claim to leadership in the international climate process.

Hopes for G7 summit

After the Leaders Summit on Climate, all eyes - and further hopes - now turn to the G7 summit in June, hosted by the UK, which also holds the COP presidency. For COP 26 in Glasgow in November to be a success, and for global momentum in the international climate process to accelerate, key finance issues need to make significant progress, such as supporting a green, climate-compatible economic recovery from the COVID-19 pandemic, including by providing the irreversible breakthrough in speeding up the decarbonization of financial flows. Importantly, developing countries also expect new efforts from leading industrialized nations on climate-equitable debt relief (for example, via debt-for-climate swaps) and on linking concessional finance to climate vulnerability (especially for Small Island Developing States) instead of country incomes, a surge in new commitments for adaptation finance, and last but not least progress in discussions on paying for climate-related loss and damage.

On all of these issues, the United States under Biden can contribute to significant progress and thus demonstrate that it is ready to take on a leadership role in the international climate process.

 

This article was first published by the Heinrich-Böll-Stiftung Washington, DC office.